Labor Law Case Digests Compilation

LABOR LAW
CASE DIGESTS
ARELLANO UNIVERSITY EMPLOYEES AND WORKERS UNION, et al. v.
COURT OF APPEALS, et al. 502 SCRA 219 (2006), THIRD DIVISION
(Carpio Morales, J.)
An ordinary striking worker may not be declared to have lost his employment
status by mere participation in an illegal strike.
The Arellano University Employees and Workers Union (the Union), the exclusive
bargaining representative of about 380 rank-and-file employees of Arellano
University, Inc. (the University), filed with the National Conciliation and Mediation
Board (NCMB) a Notice of Strike charging the University with Unfair Labor
Practice (ULP). After several controversies and petitions, a strike was staged.
Upon the lifting of the strike, the University filed a Petition to Declare the Strike
Illegal before the National Labor Relations Commission (NLRC). The NLRC issued
a Resolution holding that the University was not guilty of ULP. Consequently, the
strike was declared illegal. All the employees who participated in the illegal strike
were thereafter declared to have lost their employment status.
ISSUE:
Whether or not an employee is deemed to have lost his employment by mere
participation in an illegal strike
HELD:
Under Article 264 of the Labor Code, an ordinary striking worker may not be
declared to have lost his employment status by mere participation in an illegal
strike. There must be proof that he knowingly participated in the commission of
illegal acts during the strike. While the University adduced photographs showing
strikers picketing outside the university premises, it failed to identify who they
were. It thus failed to meet the substantiality of evidence test applicable in
dismissal cases.
With respect to the union officers, as already discussed, their mere participation in
the illegal strike warrants their dismissal.
ASIA PACIFIC CHARTERING (PHILS.) INC. v. MARIA LINDA R. FAROLAN

393 SCRA 454 (2002), THIRD DIVISION (Carpio Morales, J.)
The termination of a managerial employee on the ground of loss of confidence
should have a basis and the determination of the same cannot be left entirely to
the employer.
Petitioner Asia Pacific Chartering (Phils.) Inc. (Asia) is tasked with the selling of
passenger and cargo spaces for Scandinavian Airlines System. Petitioner Asia,
through its Vice President Catalino Bondoc (Bondoc), offered Respondent Maria
Linda R. Farolan (Farolan) the sales manager position to which Farolan accepted.
Upon Vice President Bondocs request, Farolan submitted a detailed report
attributing the drop of sales revenue to market forces beyond her control.
Consequently, Asia directed Roberto Zozobrado (Zozobrado) to implement
solutions. Zozobrado informally took over Farolans marketing and sales
1
responsibilities but she continued to receive her salary. Asia claims that the
increase in sales revenue was due to Zozobrados management.
Asia then sent a letter of termination to Farolan on the ground of loss of
confidence, forcing Farolan to file a complaint for illegal dismissal. The Labor
Arbiter found that the dismissal was illegal for lack of just cause, however, such
decision was reversed by the National Labor Relations Commission (NLRC) stating
that the termination of employment due to loss of confidence is within
management prerogative. On appeal, the Court of Appeals upheld the labor
arbiters decision. Hence, the filing of this petition.
ISSUE:
Whether or not Respondent Farolans dismissal was illegal
HELD:
A statement of the requisites for a valid dismissal of an employee is thus in order,
to wit: (a) the employee must be afforded due process, i.e., he must be given
opportunity to be heard and to defend himself; and (b) dismissal must be for a
valid cause. The manner by which Respondent Farolan was dismissed violated the
basic precepts of fairness and due process - Respondent Farolan was dismissed,
without being afforded the opportunity to be heard and to present evidence in her
defense. She was never given a written notice stating the particular acts or
omission constituting the grounds for her dismissal as required by law.
With respect to rank and file personnel, loss of trust and confidence as ground for
valid dismissal requires proof of involvement in the alleged events in question and
that mere uncorroborated assertions and accusations by the employer will not be
sufficient. But as regards a managerial employee, mere existence of a basis for
believing that such employee has breached the trust of his employer would suffice
for his dismissal. Loss of trust and confidence to be a valid ground for an
employees dismissal must be based on a willful breach and founded on clearly
established facts. A breach is willful if it is done intentionally, knowingly and
purposely, without justifiable excuse.
It is not disputed that Farolans job description, and the terms and conditions of
her employment, with the exception of her salary and allowances, were never
reduced to writing. Even assuming, however, that Farolan was a managerial
employee, the stated ground (in the letter of termination) for her dismissal, loss
of confidence, should have a basis and determination thereof cannot be left
entirely to the employer.
BACOLOD-TALISAY REALTY AND DEVELOPMENT CORPORATION, et al. v.
ROMEO DELA CRUZ 587 SCRA 304 (2009), SECOND DIVISION (Carpio
Morales, J.)
The twin notice requirement provided by law should be observed in order for a
dismissal to be valid.
Romeo dela Cruz (respondent) is an employee of Bacolod-Talisay Realty
Development Corporation (Bacolod-Talisay) as an overseer. He was suspended for
30 days for payroll paddling, selling canepoints without the knowledge and
consent of management and misappropriating the proceeds thereof, and renting
2
out tractor for use in another farm. After 30 days, he received a letter informing
him that he was dismissed from his work.
Respondent dela Cruz and Bacolod-Talisay had a confrontation before the
barangay council but they did not reach any settlement. A case for illegal dismissal
was filed by dela Cruz, and it was dismissed by the Labor Arbiter as well as the
NLRC. On the other hand, the Court of Appeals reversed the decision of the NLRC
finding that the Bacolor-Dalisay did not comply with the guidelines for the
dismissal of an employee.
ISSUE:
Whether or not petitioner, Bacolod-Talisay observed due process in dismissing
Romeo dela Cruz
HELD:
The Court of Appeals correctly held though that Bacolod-Talisay did not comply
with the proper procedure in dismissing respondent. In other words, BacolodTalisay failed to afford dela Cruz due process by failing to comply with the twin
notice requirement in dismissing him, viz: 1) a first notice to apprise him of his
fault, and 2) a second notice to him that his employment is being terminated.
The letter dated June 3, 1997 sent to dela Cruz was a letter of suspension. It did
not comply with the required first notice, the purpose of which is to apprise the
employee of the cause for termination and to give him reasonable opportunity to
explain his side.
In fine, while the dismissal of dela Cruz was for a just cause, the procedure in
effecting the same was not observed.
BILFLEX PHIL. INC. LABOR UNION et al. v. FILFLEX INDUSTRIAL AND

MANUFACTURING CORPORATION AND BILFLEX (PHILS.), INC.
Any union officer who knowingly participates in an illegal strike and any worker or
union who knowingly participates in the commission of illegal acts during a strike
may be declared to have lost his employment status.
Biflex Philippines Inc. Labor Union and Filflex Industrial and Manufacturing Labor
Union are the respective collective bargaining agents of the employees of the
sister companies Biflex and Filflex which are engaged in the garment business.
They are situated in one big compound and they have a common entrance.
On October 24, 1990, the labor sector staged a welga ng bayan to protest against
oil price hike; the unions staged a work stoppage which lasted for several days,
prompting the companies to file a petition to declare the work stoppage illegal for
failure to comply with procedural requirements.
The Labor Arbiter held that the strike is illegal and declared the officers of the
union to have lost their employment status.
ISSUE:
Whether or not the staged strike is illegal and a ground for the lost of employment
status of the union officers
HELD:
Article 264 (a) of the Labor Code states that any union officer who knowingly
participates in an illegal strike and any worker or union who knowingly
participates in the commission of illegal acts during a strike may be declared to
have lost his employment status.
Thus, a union officer may be declared to have lost his employment status if he
knowingly participates in an illegal strike and in this case, the strike is declared
illegal by the court because the means employed by the union are illegal.
Here, the unions blocked the egress and ingress of the company premises thus, a
violation of Article 264 (e) of the Labor Code which would affect the strike as
illegal even if assuming arguendo that the unions had complied with legal
formalities and thus, the termination of the employees was valid.
The court said that the legality of a strike is determined not only by compliance
with its legal formalities but also by means by which it is carried out.
CABALEN MANAGEMENT CO., INC., et al. v. JESUS P. QUIAMBAO, et al.
528 SCRA 153 (2007), SECOND DIVISION (Carpio Morales, J.)
It is a well-established rule that the employer has the burden of proving a valid
dismissal of an employee, for which it must be for a just or authorized cause and
with due process.
Jesus Quiambao, et al. were charged of tip pocketing and swapping of dining order
slips with bar order slips, among others. They were dismissed from employment
due to said acts. They filed a case against Cabalen Management Co., Inc.
(Cabalen) for illegal dismissal but the decision of the Labor Arbiter and the
National Labor Relations Commission was in favor of Cabalen. Quiambao, et al.
4
elevated the case to the Court of Appeals and the CA ruled otherwise. Cabalen
sought to set aside the decision of the CA which reversed the earlier rulings
provided for by the Labor Arbiter and the NLRC. They also questioned the
Resolution given by CA which denied their Motion for Reconsideration.
The assailed CA decision held that except for respondents Vizier Inocencio and
Vincent Edward Mapa whose petitions were dismissed pursuant to Section 5, Rule
7 of the Rules of the Rules of Court and Section 4 (a) of the Rules of Procedure of
the NLRC, herein Quiambao, et al. were illegally dismissed from their
employment. The Supreme Court affirmed the CA decision, hence, Cabalens
Motion for Reconsideration became subject of this Resolution. To the Motion,
Quiambao, et al. filed their Opposition.
ISSUES:
Whether or not Quiambao, et al. were illegally dismissed
HELD:
It is a well-established rule that the employer has the burden of proving a valid
dismissal of an employee, for which two requisites must concur: (a) the dismissal
must be for any of the causes expressed in the Labor Code; and (b) the employee
must be accorded due process, basic of which is the opportunity to be heard and
to defend himself.
To establish a just or authorized cause for dismissal, substantial evidence or "such
amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion" is required. Further required is that an employee sought to be
dismissed must be served two written notices before the termination of his
employment. The first notice must appraise him of the particular acts or omissions
upon which his dismissal is grounded; the second, to inform him of the employers
decision to terminate his employment. While the failure of the employer to comply
with these notice requirements does not make the dismissal illegal as long as a
just or authorized cause has been proved, it renders the employer liable for
payment of damages because of the violation of the workers right to statutory due
process.
In the instant case, only photocopies of the statements of Balen and Malana form
part of the records despite Cabalens reliance thereon to prove respondents
purported transgressions. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC held
that the unsigned photocopies of daily time records (DTRs), which were presented
by the therein employer to show that its employee was neglectful of his duties,
were of "doubtful or dubious probative value."
Cabalen, et al. did not even heed their own procedures on disciplinary actions. The
only facts extant in the records are that respondents were issued above-said
Corrective Action Report (CARE) Forms asking them to explain their alleged
infractions within 48 hours; and they subsequently received notices of dismissal
after they submitted their written explanations. There is, however, nothing to show
that before their dismissal, Quimbao, et al. were informed of their immediate
supervisors decision to terminate their services, or that they were thereafter
invited to an administrative investigation before the HRD manager or officer who
is tasked to conduct the investigation in the presence of the employees immediate
supervisor/s and the witnesses, if necessary, as provided under Section IV of the
companys Code of Conduct.
No record of any administrative investigation proceeding, which under the
companys rules was to be "minuted," had also been presented. Hence, only
Cabalens allegation that the statements of the witnesses were taken as part of the
5
administrative investigation is before this Court. Allegations without proof do not

deserve consideration.
Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it
was incumbent upon Cabe to len, et al. to prove it by substantial evidence. It did
not, however. In fact, Quiambao presented documents to disprove the validity of
his retrenchment on that ground. For petitioners failure to discharge its burden
then, this Court is constrained to hold that Quiambaos dismissal was not valid.
CAPITOL WIRELESS, INC. v. CARLOS ANTONIO BALAGOT
Double job per se is not illegal according to Labor Code.
Capitol Wireless, Inc. (Capwire) hired Carlos Antonio Balagot (Balagot) as
collector on September 16, 1987. Carlos is required to work outside the office and
Capwire assigned to him a motorcycle as a service vehicle, for which it shouldered
expenses for gasoline and maintenance.
Balagot was discovered to have been rendering services to China Bank and that
since 1992, Carlos had been concurrently employed with Contractual Concepts,
Inc. (CCI), a local manpower company, which assigned him to render messengerial
services to China Bank in the same year.
Capwire terminated his services on the ground of grave misconduct and willful
breach of trust and confidence. Capwire contends that the time of work of Balagot
to other companies overlaps with his work at Capwire. Balagot admitted the
charge but he filed a complaint for illegal dismissal against Capwire and its
President Epifanio Marquez.
ISSUE:
Whether or not Balagot was illegally dismissed
HELD:
Verily, jurisprudence recognizes as a valid ground for dismissal of an employees
unauthorized use of company time. And from the evidence presented, Balagot used
the company vehicle in pursuing his own interests, on company time and deviating
from his authorized route without permission.
Capwire has all the right and reason to cry foul as this is a clear case of
moonlighting and using the companys time, money, and equipment to render
service to another company.
The court said that there is no denying that taking on double job per se is not
illegal according to the Labor Code, as extra income would go a long way for an
ordinary worker like Balagot. The only limitation is where one job overlaps with
the other in terms of time and/or poses a clear case of conflict of interest as to the
nature of business of complainants two employers.
The contention of Balagot that he is working for China Bank after 5:00 pm is
untenable because he was sighted by the HR director within the premises of the
bank at 3:35 pm and as general knowledge, the banking industry follows the
ordinary working hours from 8:00 am to 5:00 pm and a bank has no use for an
employee who can only be of service to it after 5:00 pm.
CHUAYUCO STEEL MANUFACTURING CORPORATION AND/OR EDWIN

CHUA
v.
BUKLOD
NG
MANGGAGAWA
SA
CHUAYUCO
STEEL
MANUFACTURING CORPORATION
513 SCRA 621 (2007), SECOND DIVISION, (Carpio Morales, J.)
A union officer who knowingly participates in an illegal strike and a worker who
knowingly participates in the commission of an illegal strike are deemed to have
lost their employment status.
Buklod ng Manggagawa sa Chuayuco Steel Manufacturing Corporation (the
union), a legitimate labor organization, is the recognized bargaining agent of
Chuayuco Steel Manufacturing Corporation (the corporation) of which its copetitioner Edwin Chua is the President.
In the election of the union officers, Camilo Lenizo (Lenizo) emerged as President.
The corporation however refused to recognize the newly elected officers for the
reason that there is an intra-union conflict between the factions of Lenizo and
Romeo Ibanez, the former acting union president.
The union staged a strike which causes illegal acts that intimidated and harassed
the corporation and non-striking employees. The strikers use physical violence and
harass those employees who are not on their side by shouting and threatening
them not to go to work anymore. The Labor Arbiter declared the strike illegal and
thus, some of the members who participated in the mass action lost their
employment status.
ISSUE:
Whether or not some of the employees who participated in the strike should be
reinstated without loss of seniority rights
HELD:
Article 264 (a) of the Labor Code states that any union officer who knowingly
participates in an illegal strike and any worker or union who knowingly
participates in the commission of illegal acts during a strike may be declared to
have lost his employment status.
Thus, a union officer may be declared to have lost his employment status if he
knowingly participates in an illegal strike and in this case, the strike is declared
illegal by the court because the means employed by the union are illegal.
CITIBANK N.A. v. NATIONAL LABOR RELATIONS COMMISSION and
ROSITA TAN PARAGAS 563 SCRA 87 (2008), SECOND DIVISION, (Carpio
Morales, J.)
The general prayer of other reliefs is applicable only to such other reliefs
warranted by law and facts.
Rosita Tan Paragas (Paragas) worked as a filing clerk of Citibank, N.A. (Citibank)
for eighteen (18) years. She was terminated by Citibank for serious misconduct,
willful disobedience, gross and habitual neglect of duties and gross inefficiency.
Paragas filed a complaint for illegal dismissal which was dismissed for lack of
merit, finding that the dismissal on the ground of work inefficiency was valid. The
National Labor Relations Commission (NLRC) affirmed the decision of the Labor
Arbiter with the modification that Paragas should be paid separation pay as a form
of equitable relief in view of her length of service with Citibank.
Paragas filed a Motion for Partial Reconsideration of the NLRC Resolution. She no
longer challenged her dismissal on the ground of work inefficiency, but prayed that
Citibank be ordered to pay her the Provident Fund benefits under its retirement
plan for which she claimed to be qualified pursuant to Citibanks Working
Together Manual. The said manual provides that an employee discharged for
reasons other the misconduct will be paid a percentage of her share in the Fund.
Finding that Paragas dismissal was for causes other than misconduct, the NLRC
granted Paragas Motion. On appeal, the Court of Appeals dismissed the petition
for lack of merit and affirmed in toto the challenged NLRC Resolution.
ISSUE:
Whether or not the CA erred in affirming the NLRCs decision despite the latters
lack of authority to pass upon and resolve issues and grant claims not pleaded and
proved before the Labor Arbiter
HELD:
Paragas indeed prayed for "other just and equitable relief," but the same may not
be interpreted so broadly as to include even those which are not warranted by the
factual premises alleged by a party. Thus the January 24, 2003 Decision of the
Court of Appeals correctly stated: "It has been ruled in this jurisdiction that the
general prayer for 'other reliefs' is applicable to such other reliefs which are
warranted by the law and facts alleged by the respondent in her basic pleadings
and not on a newly created issue."
Paragas assertion that she mentioned the matter regarding the Provident Fund
even prior to her Motion for Partial Reconsideration on page 14 of her position
paper and again on pages 2 and 7 of her "Notice of Appeal and Appeal
Memorandum" is unavailing.
Her "Notice of Appeal and Appeal Memorandum" was filed after she had already
submitted her position paper. Thus, any mention of the Provident Fund therein
would fail to adhere to the above-ruling in Maebo, the thrust of which was
precisely that all facts, evidence, and causes of action should already be proffered
in the position papers and the supporting documents thereto, not in any later
pleading.
As to Paragas position paper, there was only the mere mention of "Provident A &
C," with the corresponding amount of P1,086,335.43, among the actual damages
that she was allegedly suffering from her continued severance from employment.
Paragas made no attempt to define what this "Provident A & C" was, nor offer any
substantiation for including it to be among her actual damages. She did not even
hint how "Provident A & C" had a bearing on retirement benefits. Thus, while
Paragas did refer to the Provident Fund in her position paper, such reference was
too vague to be a basis for any court or administrative body to grant her
retirement benefits.
Paragas justifies her failure to claim for retirement benefits before the labor
arbiter by alleging that it would be inconsistent with her prayer for reinstatement.
Paragas, however, could have easily claimed such benefits as an alternative relief.
In any event, Paragas is not entitled to retirement benefits as this Court finds that
she was validly dismissed for serious misconduct and not merely for work
inefficiency.
DYNO NOBEL PHILIPPINES, INC. v. DWPI SUPERVISORY UNION

535 SCRA 466 (2007), SECOND DIVISION (CARPIO MORALES, J.)
When a Collective Bargaining Agreement provides for a mandated increase in
salary, which was voluntarily agreed upon by the parties, the same shall be
complied with.
Edgar Ausejo (Ausejo) was hired by Dyno Noble Philippines, Inc. (DYNO-NOBEL)
as a Store Clerk. Having joined the DWPI Union (DWPIU) of the rank and file, his
salary was increased by P500 per month effective January 1, 1996. Ausejo was
then promoted to the position of General Stores Supervisor. As per company and
union regulations Ausejo ceased to be a member of the rank and file union and
joined the DWPI Supervisory Union (DWPSU). At the same time, DYNO-NOBEL
started its Salary Scaling Program which was intended to structure and align the
salary scales of its employees. Ausejo was evaluated to have no increase as per
union regulations.
Ausejo and his former union filed a request for increase in salary to DYNO-NOBEL.
Ausejo and DWPIU invoked the provisions of the Collective Bargaining Agreement
(CBA), contending that he is entitled to a mandated increase of P1,150. In its reply,
DYNO-NOBEL denied the motion contending that Ausejo is not anymore a member
of the rank and file union. DYNO-NOBEL also contended that the increase in
salary of Ausejo was reflected in his higher salary as a General Stores Supervisor.
ISSUES:
Whether or not the mandated increase of P1,150 under the CBA forged by DWPIU
was already integrated into the salary of Ausejo when he assumed the position of
General Stores Supervisor
HELD:
An examination of Ausejos Position Paper shows that he, just like the two other
supervisors, received the same monthly salary for the year 1997 and 1998.
Logically, in accordance with the 1996 CBA, for the year 1997, an increase of
P1,050 was added to the salary of each of the three, to thereby amount to a total
salary.
Clearly, the Salary Scaling Program implemented by DYNO-NOBEL was primarily
intended "to restructure and align the salary scales of the employees on the basis
of fairness and reasonable classification of jobs.
It is hard to believe that, considering the closeness in the time between the
implementation of the Salary Scaling Program and the execution of the CBA a
difference of eighteen days the negotiating panel of the Union would not have
known the rather substantial benefits and advantages accruing to the Supervisors
under the Salary Scaling Program. The purpose of the Salary Scaling Program was
intended to structure the salary scales of the employees on the basis of fairness
and reasonable classification of jobs. There is every reason to uphold the Program,
and, to uphold the claim of Ausejo that he is entitled to the [P]1,150.00 mandated
increase for 1996 upon his appointment.
EAGLE STAR SECURITY SERVICES, INC. v. BONOFACIO L. MIRANDO
For off-detail to be valid, the employer must show and prove that there was lack
of available posts.
Bonifacio Mirando was hired by Eagle Star Security Services, Inc. (Eagle Star) as
a security guard. When he reported for work, he was told by the detachment
commander not to report for duty as instructed by the head office. Mirando called
the head office and was told that he was removed from duty by Eagle Stars
operations manager Ernesto Agodilla. As Mirando was thereafter no longer asked
to report for duty, he filed a complaint for illegal dismissal against Eagle Star
before the National Labor Relations Commission (NLRC).
Eagle Star alleged that Mirando went on absence without official leave (AWOL)
and had not thereafter reported for work drawing it to send him a notice to explain
his absence but Mirando failed to respond. It further alleged that in a
Memorandum sent to Agodilla, the detachment commander reported that Mirando
pulled out his uniform and that according to him, he would render voluntary
resignation.
The labor arbiter found that Mirando was illegally dismissed. On appeal, the NLRC
affirmed the labor arbiters decision. On appeals, the CA affirmed the judgment of
the NLRC.
ISSUES:
Whether or not the Court of Appeals erred in holding the dismissal illegal
HELD:
The persistence of Mirando to resume his duties, not to mention his immediate
filing of the illegal dismissal complaint, should dissipate any doubt that he did not
abandon his job.
Clutching at straws, Eagle Star argues that Mirando was on temporary offdetail, the period of time a security guard is made to wait until he is transferred
or assigned to a new post or client; and since Eagle Stars business is primarily
dependent on contracts entered into with third parties, the temporary off-detail
of Mirando does not amount to dismissal as long as the period does not exceed 6
months, following Art. 286 of the Labor Code.
Eagle Stars citation of Article 286 of the Labor Code is misplaced. In the present
case, there is no showing that there was lack of available posts at Eagle Stars
clients or that there was a request from the client-bank, where Mirando was last
posted and which continued to hire Eagle Stars services, to replace Mirando with
another. Eagle Star suddenly prevented him from reporting on his tour of duty at
the bank on December 15, 2001 and had not thereafter asked him to report for
duty.
ABELARDO P. ABEL v. PHILEX MINING CORPORATION

Loss of trust and confidence, to be a valid ground for dismissal, must be based on
willful breach of trust and must be founded on clearly established facts.
Abelardo P. Abel, an employee of the Philex Mining Corporation, was implicated in
an irregularity occurring in the subsidence area of Philexs mine site. An
investigation was promptly launched by the corporations officers by conducting
several fact-finding meetings. Philex found Abel guilty of (1) fraud resulting in loss
of trust and confidence and (2) gross neglect of duty, and was meted out the
penalty of dismissal from employment. Abel thus filed a complaint for illegal
10
dismissal with the National Labor Relations Commission (NLRC) with claims for
annual vacation leave pay.
The Labor Arbiter ruled that Abel was dismissed illegally. He found that Philex
failed to prove by substantial evidence the alleged fraud committed by Abel,
explaining that the suggestively incriminating telephone conversations would not
suffice to lay the basis for Philexs loss of trust and confidence. On the charge of
gross negligence, the Labor Arbiter held that no negligence was present as Philex
itself admitted that Abel reported the underloading to Tabogader, who was then in
charge of the subsidence area where the alleged anomaly was happening.
The NLRC reversed the decision of the Labor Arbiter finding that Abel was guilty
of gross and habitual neglect of duty as he approved the operations even with the
gross underloading; and that he did not act on Lupegas report concerning certain
irregularities. Abels failure to perform his duty of inspecting ANSECAs operations
and vacillation on certain matters during the company investigation, among other
things, constituted sufficient basis for Philexs loss of trust and confidence. Abel
appealed to the Court of Appeals via certiorari which dismissed the motion.
Hence, this petition.
ISSUE:
Whether or not the dismissal of Abel is valid
HELD:
The law mandates that the burden of proving the validity of the termination of
employment rests with the employer. Failure to discharge this evidentiary burden
would necessarily mean that the dismissal was not justified and, therefore, illegal.
Unsubstantiated suspicions, accusations, and conclusions of employers do not
provide legal justification for dismissing employees. In case of doubt, such cases
should be resolved in favor of labor pursuant to the social justice policy of labor
laws and the Constitution.
The first requisite for dismissal on the ground of loss of trust and confidence is
that the employee concerned must be holding a position of trust and confidence.
Verily, the Court must first determine if Abel holds such a position.
The second requisite is that there must be an act that would justify the loss of
trust and confidence. Loss of trust and confidence, to be a valid cause for
dismissal, must be based on a willful breach of trust and founded on clearly
established facts. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary. Philex Mining
Corporations evidence against Abel fails to meet this standard. The Labor Arbiter
correctly found that the alleged telephone conversations between Abel and Didith
Caballero of ANSECA would not suffice to lay the basis for Philex Mining
Corporations loss of trust and confidence in Abel.
ALABANG COUNTRY CLUB, et al. v. NATIONAL LABOR
RELATIONS COMMISSION, et al. 466 SCRA 329 (2005), THIRD DIVISION,
The court cannot interfere with managements prerogative to close or cease its
business operation just because the business is not suffering from any loss or
because of the desire to provide the workers continued employment.
11
Petitioner Alabang Country Club, Inc. (ACCI) requested its Internal Auditor Irene
Campos-Ugalde to conduct a study on the profitability of its Food and Beverage
Department (F & B Department). Irene found out that the business had been
incurring substantial losses. Consequently, the management decided to transfer
the operation of the department to La Tasca Restaurant Inc. (La Tasca). ACCI then
sent its F & B Department employees individual letters informing them that their
services were being terminated and that they would receive separation pay.
The private respondent Alabang Country Club Independent Employees Union
(Union) filed before the National Labor Relations Commission (NLRC) a complaint
for illegal dismissal, unfair labor practice, regularization and damages with prayer
for the issuance of a writ of preliminary injunction against ACCI.
The Labor Arbiter (LA) dismissed the complaint for illegal dismissal which was
upheld by the NLRC. The Court of Appeals (CA) reversed the decisions of the LA
and NLRC.
ISSUE:
Whether or not the ACCI can terminate its business operation
HELD:
One of the prerogatives of management is the decision to close the entire
establishment or to close or abolish a department or section thereof for economic
reasons, such as to minimize expenses and reduce capitalization. While the Labor
Code provides for the payment of separation package in case of retrenchment to
prevent losses, it does not obligate the employer for the payment thereof if there is
closure of business due to serious losses.
As in the case of retrenchment, however, for the closure of a business or a
department due to serious business losses to be regarded as an authorized cause
for terminating employees, it must be proven that the losses incurred are
substantial and actual or reasonably imminent; that the same increased through a
period of time; and that the condition of the company is not likely to improve in
the near future.
The closure of operation of an establishment or undertaking not due to serious
business losses or financial reverses includes both the complete cessation of
operations and the cessation of only part of a companys activities.
For any bona fide reason, an employer can lawfully close shop anytime. Just as no
law forces anyone to go into business, no law can compel anybody to continue the
same. It would be stretching the intent and spirit of the law if a court interferes
with managements prerogative to close or cease its business operations just
because the business is not suffering from any loss or because of the desire to
provide the workers continued employment.
JERRY E. ACEDERA, et al. v. INTERNATIONAL
CONTAINER TERMINAL SERVICES INC.
Ordinarily, a person whose interests are already represented will not be permitted
to do the same except when there is a suggestion of fraud or collusion or that the
representative will not act in good faith.
Jerry Acedera, et al. are employees of International Container Terminal Services,
Inc. (ICTSI) and are members of Associated Port Checkers & Workers Union12
International Container Terminal Services, Inc. (APCWU-ICTSI), a duly registered

labor organization. ICTSI entered into a five-year Collective Bargaining Agreement
(CBA) with APCWU which reduced the employees work days from 304 to 250 days
a year.
The Wage Board decreed wage increases in NCR which affected ICTSI. Upon the
request of APCWU to compute the actual monthly increase in the employees
salary by multiplying the mandated increase by 365 days and dividing by 12
months, ICTSI stopped using 304 days as divisor and started using 365 days to
determine the daily wage.
Later on, ICTSI entered into a retrenchment program which prompted APCWU to
file a complaint before the Labor Arbiter (LA) for ICTSIs use of 365 days, instead
of 250 days, as divisor in the computation of wages. Acedera et al. filed a Motion
to Intervene which was denied by the LA. On appeal, National Labor Relations
Commission (NLRC) affirmed LAs decision. Acedera et al. filed a petition for
certiorari to the Court of Appeals (CA) which was dismissed.
ISSUE:
Whether or not Acedera et al. have no legal right to intervene in the case as their
intervention was a superfluity
HELD:
Acedera et al. stress that they have complied with the requisites for intervention
because (1) they are the ones who stand to gain or lose by the direct legal
operation and effect of any judgment that may be rendered in this case, (2) no
undue delay or prejudice would result from their intervention since their
Complaint-in-Intervention with Motion for Intervention was filed while the Labor
Arbiter was still hearing the case and before any decision thereon was rendered,
and (3) it was not possible for them to file a separate case as they would be guilty
of forum shopping because the only forum available for them was the Labor
Arbiter.
Acedera et al., however, failed to consider, in addition to the rule on intervention,
the rule on representation. A labor union is one such party authorized to represent
its members under Article 242(a) of the Labor Code which provides that a union
may act as the representative of its members for the purpose of collective
bargaining. This authority includes the power to represent its members for the
purpose of enforcing the provisions of the CBA. That APCWU acted in a
representative capacity "for and in behalf of its Union members and other
employees similarly situated, the title of the case filed by it at the Labor Arbiters
Office so expressly states.
While a party acting in a representative capacity, such as a union, may be
permitted to intervene in a case, ordinarily, a person whose interests are already
represented will not be permitted to do the same except when there is a
suggestion of fraud or collusion or that the representative will not act in good faith
for the protection of all interests represented by him.
Acedera et al. cite the dismissal of the case filed by ICTSI, first by the Labor
Arbiter, and later by the Court of Appeals. The dismissal of the case does not,
however, by itself show the existence of fraud or collusion or a lack of good faith
on the part of APCWU. There must be clear and convincing evidence of fraud or
collusion or lack of good faith independently of the dismissal. This, Acedera et al.
failed to proffer.
13
Acedera et al. likewise express their fear that APCWU would not prosecute the
case diligently because of its "sweetheart relationship" with ICTSI. There is
nothing on record, however, to support this alleged relationship which allegation
surfaces as a mere afterthought because it was never raised early on. It was raised
only in petitioners-appellants reply to ICTSIs comment in the petition at bar, the
last pleading submitted to this Court, which was filed on June 20, 2001 or more
than 42 months after petitioners-appellants filed their Complaint-in-Intervention
with Motion to Intervene with the Labor Arbiter.
To reiterate, for a member of a class to be permitted to intervene in a
representative action, fraud or collusion or lack of good faith on the part of the
representative must be proven. It must be based on facts borne on record. Mere
assertions, as what petitioners-appellants proffer, do not suffice.
ALDEGUER & CO., INC. /LOALDE BOUTIQUE v. HONEYLINE TOMBOC
Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative is a just cause for his dismissal from
employment.
Petitioner Aldeguer and Co., Inc./Loalde Boutique promoted respondent Honeyline
Tomboc (Tomboc) as Officer-in-Charge (OIC) of its Loalde Ayala Boutique (Loalde
Ayala) in the Ayala Center, Cebu City. After conducting an audit of sales, Loalde
Boutique concluded that Tomboc misappropriated certain amount which is a just
cause for termination. Consequently, Tombo was notified of the termination of her
services.
Tomboc subsequently filed a complaint in the National Labor Relations
Commission (NLRC) for illegal dismissal, illegal salary deductions, underpayment
of wages, non-payment of 13th month pay and damages. The Labor Arbiter
dismissed the complaint which was upheld by the NLRC. On appeal, the Court of
Appeals reversed the NLRC decision and ordered her reinstatement with full
payment of back wages and without loss of seniority rights. The CA held Tomboc
was illegally dismissed and was denied of due process as she was not afforded a
chance to refute the charge of misappropriation against her.
ISSUES:
Whether or not the termination of Tomboc was for just cause
HELD:
Aldeguer and Co., Inc./Loalde Boutique has shown just cause for the termination
of Tombocs employment under Art. 282 of the Labor Code on the ground of
fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative.
The claim of Jinky, a cashier, in her affidavit that it was Tomboc who turned over
the deposits to the bank representative on May 13, 1997 was corroborated by Kay,
the branch head of the Solidbank-Gorordo Branch who personally picked up the
deposits from Loalde Ayala on May 13 and 14, 1997. Aldeguer and Co., Inc./Loalde
Boutique in fact presented deposit slips showing that, contrary to its policy, cash
sales for the
day were on several occasions not deposited on the next banking day.
Tombocs contention that the Labor Arbiter and the NLRC ignored the
Memorandum issued by Aldeguer and Co., Inc./Loalde Boutique on February 29,
1997 indicating her duties and responsibilities which do not include handling cash
14
collection of sales and making deposits with the bank does not lie. It has been
established that while a boutique-in-charge is ordinarily not allowed to handle
cashiering, she may do so, however, if the need arises. At any rate, Jinky and some
of the affiants stated in their affidavits that Tomboc interfered with cashiering
tasks, in violation of company policy
CORAZON ALMIREZ v. INFINITE LOOP TECHNOLOGY CORPORATION, et
al.
Under the control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to control not only
the end achieved, but also the manner and means to be used in reaching that end.
Petitioner Corazon Almirez was hired by respondent Infinite Loop Technology
Corporation (Infinite Loop) to be a Refinery Senior Process Design Engineer for a
specific project starting October 18, 1999 with a guaranty of 12 continuous
months of service or until a mutually agreed date. However, Almirez was later on
suspended. Hence, she filed an action before the National Labor Relations
Commission (NLRC) against Infinite Loop and its General Manager/President/copetitioner Edwin R. Rabino on the ground of breach of contract of employment.
Both the Labor Arbiter and the NLRC ruled that there is an existing employeremployee relationship between Almirez and Infinite Loop since the latter exercises
control over the means and methods used by Almirez in the performance of her
duties.
The Court of Appeals ruled that there was no existing employer-employee
relationship between the parties since Almirez was hired to render her
professional service only for a specific project.
ISSUE:
Whether or not there is employee-employer relationship between Almirez and
Infinite Loop
HELD:
To ascertain the existence of an employer-employee relationship, jurisprudence
has invariably applied the four-fold test, to wit: (1) the manner of selection and
engagement; (2) the payment of wages; (3) the presence or absence of the power
of dismissal; and (4) the presence or absence of the power of control. Of these
four, the last one, the so called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employeremployee relationship.
Under the control test, an employer-employee relationship exists where the person
for whom the services are performed reserves the right to control not only the end
achieved, but also the manner and means to be used in reaching that end.
From the earlier-quoted scope of Almirez professional services, there is no
showing of a power of control over petitioner. The services to be performed by her
specified what she needed to achieve but not on how she was to go about it.
Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, paragraph
No. 6 of the "Scope of [Almirez] Professional Services" requiring her to "[m]ake
reports and recommendations to the company management team regarding work
progress, revisions and improvement of process design on a regular basis as
15
required by company management team" does not "show that the companys
management team exercises control over the means and methods in the
performance of her duties as Refinery Process Design Engineer." Having hired
Almirez professional services on account of her "expertise and qualifications" as
Almirez herself proffers in her Position Paper, the company naturally expected to
be updated regularly of her "work progress," if any, on the project for which she
was specifically hired.
The deduction from Almirez remuneration of amounts representing SSS
premiums, Philhealth contributions and withholding tax, was made in the only pay
slip issued to Almirez, that for the period of January 16-31, 2000, the other
amounts of remuneration having been documented by cash vouchers. Such pay
slip cannot prove the existence of an employer-employee relationship between the
parties.
As for the designation of the payments to Almirez as "salaries," it is not
determinative of the existence of an employer-employee relationship. "Salary" is a
general term defined as "a remuneration for services given." It is the above-quoted
contract of engagement of services-letter dated September 30, 1999, together
with its attachments, which is the law between the parties. Even Almirez concedes
rendering service "based on the contract," which, as reflected earlier, is bereft of a
showing of power of control, the most crucial and determinative indicator of the
presence of an employer-employee relationship.
SPOUSES PONCIANO AYA-AY, SR. and CLEMENCIA AYA-AY v. ARPAPHIL
SHIPPING CORP., and MAGNA MARINE INC.
Death benefits shall be awarded only when the cause of death of the employee was
proved by substantial evidence to be reasonably connected with his work or his
working conditions.
Ponciano Aya-ay Jr. is a seaman engaged by Arpaphil Shipping Corporation to work
under an 11-month contract of employment for co-respondent Magna Marine Inc.
On board the vessel and while performing his work, Aya-ay met an eye injury
thereby requiring him to undergo a corneal transplant. Upon mutual consent of
Magna Marine and Aya-ay, Aya-ay was repatriated to Manila. While waiting for an
eye donor, Aya-ay died. The death certificate indicates that the immediate cause of
his death is cerebro-vascular accident (CVA) commonly known as stroke.
Petitioners Ponciano Aya-ay Sr. and Clemencia Aya-ay, parents of Aya-ay, now
claims for death compensation benefits from Arpaphil and Magna Marine, which
the latter rejected.
Both the National Labor Relations Commission (NLRC) and the Court of Appeals
(CA) denied their claims. Hence, this appeal.
ISSUE:
Whether or not the heirs of Aya-ay are entitled to claim death benefits under POEA
Standard Employment Contract
HELD:
Part II, Section C, Nos. 1 and 3 of the POEA Standard Employment Contract
Governing the Employment of All Filipino Seamen on Board Ocean-Going Vessels
provide, among other things that compensation and benefits may be availed of by
16
the worker provided he/she dies during the term of the contract or he/she has died
as a result of injury or illness during the term of the employment.
Upon mutual consent of Aya-ay and Arpaphil and Magna Marine, he was on July 5,
1995 repatriated on account of his eye injury. Thus his employment had been
effectively terminated on that particular date. At all events, under the October 15,
1994 Contract of Employment, Aya-ay ceased to be an employee on September 26,
1995, hence, he was no longer an employee when he died on December 1, 1995.
It is, therefore, crucial to determine whether Aya-ay died as a result of, or in
relation to, the eye injury he suffered during the term of his employment. If the
injury is the proximate cause, or at least increased the risk, of his death for which
compensation is sought, recovery may be had for said death.
Unless there is substantial evidence showing that: (a) the cause of Aya-ays death
was reasonably connected with his work; or (b) the sickness/ailment for which he
died is an accepted occupational disease; or (c) his working conditions increased
the risk of contracting the disease for which he died, death compensation benefits
cannot be awarded.
ARLYN D. BAGO v. NATIONAL LABOR RELATIONS COMMISSION and
STANDARD INSURANCE CO. INC. AND/OR ERNESTO ECHAUS
520 SCRA 644 (2007), SECOND DIVISION (Carpio-Morales, J.)
As a general rule, employers are given a wide latitude of discretion in terminating
the employment of managerial personnel or those who, while not of similar rank,
perform functions which by their nature require the employers full trust and
confidence.
Arlyn Bago (Bago) and five other employees were dismissed by Celia P. Abordo
(Abordo), head of the Tuguegarao Branch of Standard Insurance Company
Incorporated (SICI) for manipulating the company funds and spreading damaging
rumors. Bago, the auditor of the company, and the five other employees apologized
for spreading the rumors. Abordo issued a memo to the employees requiring an
explanation for the charges. Thinking that Abordo had already forgiven them, the
employees did not respond to the memo.
Not receiving any reply, the Human Resource Department of SICI proceeded with
their investigation and found all the employees guilty and dismissed them for loss
of confidence and serious misconduct. Bago filed a complaint for illegal dismissal.
She contended that there was no due process in the investigation and that
dismissal is a severe penalty for the offenses charged.
The Labor Arbiter found that Bago was illegally dismissed but the National Labor
Relations Commission (NLRC), reversed the Labor Arbiter's decision and declared
valid the termination of Arlyns services on the grounds of loss of trust and
confidence and dishonesty.
ISSUE:
Whether or not Bago was illegally dismissed by Standard Insurance Company
Incorporated
HELD:
As a general rule, employers are allowed a wide latitude of discretion in
terminating the employment of managerial personnel or those who, while not of
17
similar rank, perform functions which by their nature require the employers full
trust and confidence. Proof beyond reasonable doubt is not required. It is
sufficient that there is some basis for loss of confidence, such as when the
employer has reasonable ground to believe that the employee concerned is
responsible for the purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence demanded by his
position.
This must be distinguished from the case of ordinary rank-and-file employees,
whose termination on the basis of these same grounds requires a higher proof of
involvement in the events in question; mere uncorroborated assertions and
accusations by the employer will not suffice.
Even assuming that Arlyn may be considered a rank and file employee, sufficient
evidence of her involvement in the dishonest scheme of SICIs accountant and
cashier who were also charged and found guilty exists. Not only was her
participation established by the internal audit conducted; the cashier identified
her as part of the scheme, and she herself admitted her involvement.
CALAMBA MEDICAL CENTER v. NATIONAL LABOR RELATIONS
COMMISSION,et al.
An employment relationship exists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the
physician is to accomplish his task.
Petitioner Calamba Medical Center (CMC), engaged the services of medical
doctors-spouses Ronaldo Lanzanas (Dr. Ronaldo) and Merceditha Lanzanas (Dr.
Merceditha) as part of its team of resident physicians. They were given, among
others, identification cards and work schedules; and were paid a monthly retainer.
They were likewise enrolled in the Social Security System (SSS). Subsequently,
CMCs medical director issued a Memorandum to Dr. Ronaldo after a resident
physician overheard Dr. Ronaldo and a fellow employee discussing the low
admission in the hospital. After the incident involving her husband, Dr. Merceditha
was no longer given any work assignments.
Afterwards, the rank and file employees union of Calamba Medical Center went on
a strike. Dr. Ronaldo and Dr. Merceditha meanwhile filed a complaint for illegal
suspension and illegal dismissal, respectively before the National Labor Relations
Commission Regional Arbitration Board (NLRC-RAB). Consequently, the
Department of Labor and Employment (DOLE) issued a return to work order. Dr.
Ronaldo, on the other hand, received a notice of termination indicating his failure
to return for work. Dr. Ronaldo thus amended his complaint to illegal dismissal.
The CMC contends that the doctors-spouses are not employees of the same, so
that they cannot be illegally dismissed.
ISSUES:
Whether or not an employee-employer relationship does not exist between
Calamba Medical Center and the doctors-spouses Lanzanas
HELD:
Under the control test, an employment relationship exists between a physician
and a hospital if the hospital controls both the means and the details of the
process by which the physician is to accomplish his task.
18
Where a person who works for another does so more or less at his own pleasure
and is not subject to definite hours or conditions of work, and is compensated
according to the result of his efforts and not the amount thereof, the element of
control is absent.
As priorly stated, the spouses-doctors maintained specific work-schedules, as
determined by petitioner through its medical director, which consisted of 24-hour
shifts totaling forty-eight hours each week and which were strictly to be observed
under pain of administrative sanctions.
That CMC exercised control over spouses-doctors gains light from the undisputed
fact that in the emergency room, the operating room, or any department or ward
for that matter, spouses-doctors work is monitored through its nursing
supervisors, charge nurses and orderlies. Without the approval or consent of CMC
or its medical director, no operations can be undertaken in those areas. For
control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to
wield the power. With respect to spouses-doctors sharing in some hospital fees,
this scheme does not sever the employment tie between them and CMC as this
merely mirrors additional form or another form of compensation or incentive
similar to what commission-based employees receive as contemplated in Article 97
(f) of the Labor Code.
The spouses-doctors were in fact made subject to petitioner-hospitals Code of
Ethics, the provisions of which cover administrative and disciplinary measures on
negligence of duties, personnel conduct and behavior, and offenses against
persons, property and the hospitals interest.
More importantly, the CMC itself provided incontrovertible proof of the
employment status of respondents, namely, the identification cards it issued them,
the payslips and BIR W-2 (now 2316) Forms which reflect their status as
employees, and the classification as salary of their remuneration. Moreover, it
enrolled respondents in the SSS and Medicare (Philhealth) program. It bears
noting at this juncture that mandatory coverage under the SSS Law is premised on
the existence of an employer-employee relationship,[35] except in cases of
compulsory coverage of the self-employed. It would be preposterous for an
employer to report certain persons as employees and pay their SSS premiums as
well as their wages if they are not its employees.
And if the spouses-doctors were not CMCs employees, how does it account for its
issuance of the earlier-quoted March 7, 1998 memorandum explicitly stating that
respondent is employed in it and of the subsequent termination letter indicating
Dr. Ronaldos employment status.
Finally, under Section 15, Rule X of Book III of the Implementing Rules of the
Labor Code, an employer-employee relationship exists between the resident
physicians and the training hospitals, unless there is a training agreement
between them, and the training program is duly accredited or approved by the
appropriate government agency. In the spouses-doctors case, they were not
undergoing any specialization training. They were considered non-training general
practitioners, assigned at the emergency rooms and ward sections.
CLARION PRINTING HOUSE, INC. et al. v. NATIONAL LABOR RELATIONS
COMMISSION et al.
19
Retrenchment is a valid ground for the dismissal of an employee.

Clarion Printing House (Clarion), a company owned by EYCO Group of Companies
(EYCO) hired Michelle Miclat (Miclat) as marketing assistant on a probationary
basis. During that time, she was not informed of the standards that she should
meet to qualify as a regular employee.
EYCO subsequently filed a petition for petition for suspension of payment as well
as an appointment of a rehabilitation receivership committee before SEC on the
ground that they are suffering financial difficulty. Pursuant to this, a retrenchment
occurred, thus terminating Miclat.
Conversely, Miclat filed a complaint for illegal dismissal before the NLRC. Miclat
contends that assuming her termination is necessary, it was not done in a proper
manner; there was no notice that was given to her. On the other hand, Clarion
contends that they are not liable for retrenching some employees because EYCO is
being placed under receivership, and a memorandum was given to employees,
hence they substantially complied with the notice requirement. NLRC rendered its
decision in favor of Miclat and found that she was illegally dismissed. On appeal,
the Court of Appeals held that Clarion failed to prove its ground for retrenchment
as well as compliance with the mandated procedure. It further ruled that Miclat
should be reinstated and paid backwages. Hence, this petition.
Issue:
Whether or not Miclat was illegally dismissed
Held:
It is likewise well-settled that for retrenchment to be justified, any claim of actual
or potential business losses must satisfy the following standards: (1) the losses are
substantial and not de minimis; (2) the losses are actual or reasonably imminent;
(3) the retrenchment is reasonably necessary and is likely to be effective in
preventing expected losses; and (4) the alleged losses, if already incurred, or the
expected imminent losses sought to be forestalled, are proven by sufficient and
convincing evidence.
From the provisions of P.D. No. 902-A, as amended, the appointment of a receiver
or management committee by the SEC presupposes a finding that, inter alia, a
company possesses sufficient property to cover all its debts but "foresees the
impossibility of meeting them when they respectively fall due" and "there is
imminent danger of dissipation, loss, wastage or destruction of assets of other
properties or paralization of business operations."
That the SEC, mandated by law to have regulatory functions over corporations,
partnerships or associations, appointed an interim receiver for the EYCO Group of
Companies on its petition in light of, as quoted above, the therein enumerated
"factors beyond the control and anticipation of the management" rendering it
unable to meet its obligation as they fall due, and thus resulting to "complications
and problems . . . to arise that would impair and affect [its] operations . . ." shows
that CLARION, together with the other member-companies of the EYCO Group of
Companies, was suffering business reverses justifying, among other things, the
retrenchment of its employees.
ERIC DELA CRUZ et al. v. COCA-COLA BOTTLERS PHILS. INC.
20

Acts by employees which are inimical to the employers interest are deemed
willful breach of the trust and confidence reposed in them.
Raymund Sales, a salesman of Coca-Cola Bottlers Phils. Inc (Coca-Cola), figured
an accident while driving a vehicle he was not authorized to use. Sales was
hospitalized and was observed that he was under the influence of liquor at the
time of the accident and was included in the police blotter.
Respondent Coca-Cola discovered that Sales co-employees secured a police report
and medical certificate which omitted the fact that Sales was under the influence
of alcohol. Coca-Cola required Sales Supervisors John Espina, Raul M. Lacuata
(Lacuata), and Eric dela Cruz (dela Cruz), to explain why no disciplinary action be
taken against them. Espina denied the fact that he altered the documents.
Petitioner Dela Cruz said that he just asked for a copy of the police report one
Melvin Asuncion. And lastly, Petitioner Lacuata said that he has no participation in
the alleged alteration because he only picked-up the medical certificate from the
Hospital. Further investigation shows that they conspired to alter the medical
certificate and the police report. After such finding they were dismissed from
employment. Espina, Lacuata and dela Cruz filed separate complaints for illegal
dismissal with the contention that the alleged altering of documents is work
related and is a willful breach of confidence.
The Labor Arbiter dismissed Espinas complaint for lack of merit. Dela Cruz was
found to be illegally dismissed. Lacuata was found to be at fault for doing nothing
to stop Espina from obtaining false police and medical reports. The respondent
Coca-Cola was ordered to reinstate dela Cruz and pay both petitioners dela Cruz
and Lacuata their respective back wages, 13th month pay and separation pay. On
appeal, the National Labor Relations Commission (NLRC) affirmed the Labor
Arbiters decision but deleted the award of moral damages in favor of dela Cruz.
Its motion for reconsideration having been denied, respondent filed a Petition for
Certiorari before the Court of Appeals (CA). The CA set aside the NLRC decision
and held that petitioners Lacuata and dela Cruz were validly dismissed.
ISSUE:
Whether or not Lacuata and dela Cruz were validly dismissed on the grounds of
altering the medical certificate and police report of Sales
HELD:
Dela Cruz et al. contend, however, that for loss of trust and confidence to be a
ground for termination of employment, it must be willful and must be connected
with the employees work.
By obtaining an altered police report and medical certificate, Dela Cruz et al.
deliberately attempted to cover up the fact that Sales was under the influence of
liquor at the time the accident took place. In so doing, they committed acts
inimical to respondents interests. They thus committed a work-related willful
breach of the trust and confidence reposed in them.
PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMOND
HOTEL) v. MANILA DIAMOND HOTEL EMPLOYEES UNION
21
An ordinary striking worker cannot be dismissed for mere participation in an

illegal strike unless there be a proof that he committed illegal acts during a strike.
The Diamond Hotel Employee's Union (the union) filed a petition for Certification
Election before the DOLE-National Capital Region (NCR) seeking certification as
the exclusive bargaining representative of its members. The DOLE-NCR denied
said petition as it failed to comply with the legal requirements.
The Union later notified petitioner hotel of its intention to negotiate for collective
bargaining agreement (CBA). The Human Resource Department of Diamond Hotel
rejected the notice and advised the union since it was not certified by the DOLE as
the exclusive bargaining agent, it could not be recognized as such. Since there
was a failure to settle the dispute regarding the bargaining capability of the union,
the union went on to file a notice of strike due to unfair labor pracritce (ULP) in
that the hotel refused to bargain with it and the rank-and-file employees were
being harassed and prevented from joining it. In the meantime, Kimpo filed a
complaint for ULP against petitioner hotel.
After several conferences, the union suddenly went on strike. The following day,
the National Union of Workers in the Hotel, Restaurant and Allied Industries
(NUWHRAIN) joined the strike and openly extended its support to the union. The
some of the entrances were blocked by the striking employees. The National
Labour Relations Commission (NLRC) representative who conducted an ocular
inspection of the Hotel premises confirmed in his Report that the strikers
obstructed the free ingress to and egress from the Hotel. The NLRC thus issued a
Temporary Restraining Order (TRO) directing the strikers to immediately "cease
and desist from obstructing the free ingress and egress from the Hotel premises.
During the implementation of the order, the striking employees resisted and some
of the guards tasked to remove the barricades were injured. The NLRC declared
that the strike was illegal and that the union officers and members who
participated were terminated on the grounds of participating in an illegal strike.
The union contended that the strike was premised on valid ground and that it had
the capacity to negotiate the CBA as the representatives of the employees of
Diamond Hotel. The union contended that their dismissal is tantamount to an
unfair labour practice and union busting.
On appeal, the Court of Appeals affirmed the NLRC Resolution dismissing the
complaints of Mary Grace, Agustin and Rowena and of the union. It modified the
NLRC Resolution, however, by ordering the reinstatement with back wages of
union members.
ISSUE:
Whether or not the dismissal of the union members is valid on the grounds of
participating in an illegal strike
HELD:
Even if the purpose of a strike is valid, the strike may still be held illegal where the
means employed are illegal. Thus, the employment of violence, intimidation,
restraint or coercion in carrying out concerted activities which are injurious to the
rights to property renders a strike illegal. And so is picketing or the obstruction to
the free use of property or the comfortable enjoyment of life or property, when
accompanied by intimidation, threats, violence, and coercion as to constitute
nuisance.
As the appellate court correctly held, the union officers should be dismissed for
staging and participating in the illegal strike, following paragraph 3, Article 264(a)
22
of the Labor Code which provides that ". . .any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during strike may be declared to
have lost his employment status . . ."
An ordinary striking worker cannot, thus be dismissed for mere participation in an
illegal strike. There must
be proof that he committed illegal acts during a strike, unlike a union officer who
may be dismissed by mere knowingly participating in an illegal strike and/or
committing an illegal act during a strike.
DIGITEL TELECOMMUNICATIONS PHILIPPINES, INC.,
et al. v. MARIQUIT SORIANO
Forced resignation must be sufficiently established by substantial, concrete and
credible evidence.
Mariquit Soriano (Soriano) was hired as Director of Marketing by Digitel
Telecommunications Philippines, Inc. (Digitel). Soriano worked under Vice
President for Business Division Eric J. Severino (Severino) and Senior Executive
Vice President Johnson Robert L. Go (Go). Following a professional dispute against
Severino and Go, Soriano filed a resignation letter which was accepted by her
superiors.
After her resignation, Soriano filed a suit for illegal termination alleging that she
was forced to resign due to professional and sexual harassment. She alleged that
her superiors are preventing her former colleagues in testifying to the sexual
harassment. She produced an affidavit by one of the persons involved with Digitel
stating that the employees of the company were being forced not to testify against
Go and Severino. In defense, Go and Severino provided witnesses that testified
that the acts alleged by Soriano din not happen.
The Labor Arbiter held that Mariquit voluntarily resigned, thus dismissing the
complaint. On appeal, the NLRC affirmed the findings of the Labor Arbiter. The
Court of Appeals reversed the decision of NLRC. Hence,this petition.
ISSUE:
Whether or not the Soriano was forced to resign, due to professional and sexual
harassment, thus amounting to constructive dismissal.
HELD:
Soriano's own allegation, although they are so detailed, appear incredible if not
downright puny. An analysis of her statements shows that her own conclusion that
she was being sexually and professionally harassed was on the basis of her own
suppositions, conjectures, and surmises.
She could not satisfactorily explain her allegation that she was consistently
professionally harassed by respondent Severino. The latter's alleged words: "How
come you claim you know so much yet nothing ever gets done in your
department?" do not jurisprudentially constitute nor clearly establish "professional
harassment." Aside from these words, the complainant could only venture to allege
instances in general and vague terms. As to the facts allegedly constituting "sexual
harassment" advanced by Go and Severino, after an objective analysis over their
assertions as stated in their respective counter-affidavits and further considering
23
the other supporting documents attached to the respondents' pleadings, it is found

that these far out weigh the Soriano's own evidence
A reading of the affidavit of the witness, who was never an employee nor present
at the party of Digitel, reveals, however, that she merely "concluded" that the
employees of Digitel were instructed or harassed not to testify in favor of Soriano
when they failed to meet one Matet Ruiz, a Digitel employee "who kept avoiding to
meet
With such tendency to threaten resignation everytime higher management would
refuse her demand to transfer subordinates who had administrative differences
with her, we therefore have no doubt that complainant voluntarily resigned when
respondent Severino refused to heed her demand that Ms. Arnedo and Ms.
Inductivo, her subordinates, be transferred to other departments. We also have no
doubt that such resignation does not constitute constructive dismissal, much less
an illegal one.
DE LA SALLE UNIVERSITY and DR. CARMELITA I. QUEBENGCO v. DE LA
SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSU-NAFTEU)
It is axiomatic in labor relations that a Collective Bargaining Agreement entered
into by a legitimate labor organization and an employer becomes the law between
the parties, compliance with which is mandated by express policy of the law.
In 2001, a splinter group of the De La Salle University Employees Association
(DLSU-NAFTEU) led by one Belen Aliazas (Aliazas group) filed a petition for
conduct of elections with the Department of Labor and Employment (DOLE),
alleging that the then incumbent officers of DLSU-NAFTEU had failed to call for a
regular election since 1985. DOLE-NCR held that the holdover authority of DLSUNAFTEUs incumbent set of officers had been extinguished by virtue of the
execution of the CBA. It accordingly ordered the conduct of elections to be placed
under the control and supervision of its Labor Relations Division and subject to
pre-election conferences. Even with the conditions for the conduct of election
imposed by the DOLE-NCR, DLSU-NAFTEU called for a regular election without
prior notice to the DOLE and without the conduct of pre-election conference. The
incident prompted the Aliazas group to file an Urgent Motion for Intervention with
the Bureau of Labor Relations (BLR) of the DOLE. The BLR granted the Aliazas
groups motion for intervention three days before the intended date of election.
The Aliazas group requested the University to escrow all union dues/agency fees
and whatever money considerations deducted from salaries of concerned coacademic personnel until such time that an election of union officials has been
scheduled and subsequent elections has been held. DLSU and Quebengcos move
prompted DLSU-NAFTEU to file a complaint for Unfair Labor Practice (ULP
complaint), claiming that they unduly interfered with its internal affairs and
discriminated against its members.
The Labor Arbiter dismissed DLSU-NAFTEUs ULP complaint. The Court of
Appeals reversed the said Order of the NLRC with respect to the subsuming of
ULPs complaint under the certified case, the ULP complaint having been, at the
time the NLRC Third Division Order was issued, already disposed of by the
Arbiter and was in fact pending appeal before the NLRC Second Division.
ISSUE:
24
Whether or not DLSU and Quebengco is guilty of unfair labor practice

HELD:
On the other matter raised by DLSU and Quebengco that their acts of
withholding union and agency dues and suspension of normal relations with
respondents incumbent set of officers pending the intra-union dispute did not
constitute interference, the Court finds for DLSU-NAFTEU.
Pending the final resolution of the intra-union dispute, DLSU-NAFTEUs officers
remained duly authorized to conduct union affairs. It bears noting that at the time
DLSU and Quebengcos questioned moves were adopted, a valid and existing CBA
had been entered between the parties. It thus behooved DLSU to observe the
terms and conditions thereof bearing on union dues and representation. It is
axiomatic in labor relations that a CBA entered into by a legitimate labor
organization and an employer becomes the law between the parties, compliance
with which is mandated by express policy of the law. Respecting the issue of
damages, DLSU-NAFTEU, in its Position Paper before the Labor Arbiter, prayed for
the award of exemplary damages, nominal damages, and attorneys fees.
Exemplary or corrective damages are imposed by way of example or correction for
the public good in addition to the moral, temperate, liquidated or compensatory
damages. While the amount of exemplary damages need not be proved,
respondent must show proof of entitlement to moral, temperate or compensatory
damages before the Court may consider awarding exemplary damages. No such
damages were prayed for, however, hence, the Court finds no basis to grant the
prayer for exemplary damages.
CARMEN B. DY-DUMALASA v. DOMINGO SABADO S. FERNANDEZ, et al.
593 SCRA 656, (2009), SECOND DIVISION (Carpio Morales, J.)
Procedural rules governing service of summons, in quasi-judicial proceedings, are
not strictly construed.
Domingo Fernandez, et al., former employees of Helios Manufacturing
Corporation (HELIOS), filed a complaint for illegal dismissal or illegal closure of
business, non-payment of salaries and other money claims against HELIOS. The
Labor Arbiter found that the closure of the Muntinlupa office/plant was a sham, as
HELIOS simply relocated its operations to a new plant in Carmona, Cavite under
the new name of Pat & Suzara, in response to the newly-established local union.
HELIOS and it Board of Directors and stockholders were held liable.
The NLRC modified the Labor Arbiters Order, holding that Dumalasa is not jointly
and severally liable with HELIOS for Fernandez, et al.s claim, there being no
showing that she acted in bad faith nor that HELIOS cannot pay its obligations.
Dumalasa moved for reconsideration, but this was denied, hence, she appealed to
the Court of Appeals.
The appellate court reversed and set aside the NLRC Resolution, holding that
what the NLRC, in effect, modified was not the Order denying the Motion to Quash
the Writ of Execution, but the Labor Arbiters Decision itself. This is an
impermissible act since the Decision has become final and executor; hence, it
could no longer be reversed or modified.
Respecting NLRCs pronouncement that Dumalasa was not jointly and severally
liable, the appellate court held that the same is a superfluity since there was no
25
statement, either in the main case or in the Writ, that the liability is solidary.
Therefore, Dumalasa is merely jointly liable for the judgment award. Dumalasa
moved for reconsideration of the appellate courts Decision, which was denied.
ISSUES:
1.) Whether or not the Labor Arbiter acquired jurisdiction over Dumalasa
2.) Whether or not Dumalasa is solidarily liable with HELIOS for the judgment
award
HELD:
Contrary to Dumalasas contention, the Labor Arbiter acquired jurisdiction over
her person regardless of the fact that there was allegedly no valid service of
summons. It bears noting that, in quasi-judicial proceedings, procedural rules
governing service of summons are not strictly construed. Substantial compliance
therewith is sufficient. In the cases at bar, Dumalasa, her husband and three other
relatives, were all individually impleaded in the complaint. The Labor Arbiter
furnished her with notices of the scheduled hearings and other processes. It is
undisputed that HELIOS, of which she and her therein co-respondents in the
subject cases were the stockholders and managers, was in fact heard, proof of
which is the attendance of her husband, President-General Manager of HELIOS,
together with counsel in one such scheduled hearing and the Labor Arbiters
consideration of their position paper in arriving at the Decision, albeit the same
position paper was belatedly filed.
Clearly, Dumalasa was adequately represented in the proceedings conducted by
the Labor Arbiter by the lawyer retained by HELIOS.
Taking into account the peculiar circumstances of the cases, HELIOS knowledge
of the pendency thereof and its efforts to resist them are deemed to be knowledge
and action of petitioner. That Dumalasa and her fellow members of the Board
refused to heed the summons and avail of the opportunity to defend themselves as
they instead opted to hide behind the corporate veil does not shield them from the
application of labor laws.
Dumalasa cannot now thus question the implementation of the Writ of Execution
on her on the pretext that jurisdiction was not validly acquired over her person or
that HELIOS has a separate and distinct personality as a corporate entity. To apply
the normal precepts on corporate fiction and the technical rules on service of
summons would be to overturn the bias of the Constitution and the laws in favor of
labor.
On Carmens liability
A perusal of the Labor Arbiters Decision readily shows that, notwithstanding the
finding of bad faith on the part of the management, the dispositive portion did not
expressly mention the solidary liability of the officers and Board members,
including Dumalasa.
Ineluctably, absent a clear and convincing showing of the bad faith in effecting the
closure of HELIOS that can be individually attributed to petitioner as an officer
thereof, and without the pronouncement in the Decision that she is being held
solidarily liable, petitioner is only jointly liable.
The Court in fact finds that the present action is actually a last-ditch attempt on
the part of Dumalasa to wriggle its way out of her share in the judgment obligation
26
and to discuss the defenses which she failed to interpose when given the
opportunity. Even as Dumalasa avers that she is not questioning the final and
executory Decision of the Labor Arbiter and admits liability, albeit only joint, still,
she proceeds to interpose the defenses that jurisdiction was not acquired over her
person and that HELIOS has a separate juridical personality.
As for Dumalasas questioning the levy upon her house and lot, she conveniently
omits to mention that the same are actually conjugal property belonging to her
and her husband. Whether petitioner is jointly or solidarily liable for the judgment
obligation, the levied property is not fully absolved from any lien except if it be
shown that it is exempt from execution.
DYNAMIC SIGNMAKER OUTDOOR ADVERTISING SERVICES, INC., et al. v.
FRANCISCO POTONGAN
If exercised in good faith for the purpose of advancing business interests, not of
defeating or circumventing the rights of employees, the managerial prerogative to
transfer personnel from one area of operation to another is justified.
Respondent Francisco Potongan (Potongan) worked for Dynamic Signmaker
Outdoor Advertising Services (Corporation) as a Production Supervisor. The union
of rank-and-file employees of corporation declared a strike on the ground that the
corporation replaced all its supervisors. Subsequently Potongan did not receive his
salary and he was advised to take an indefinite leave of absence. Then Potongan
was being charge by the company for the alleged burning of corporations main
building and for the disruption of work. However, Potangan denied all allegations.
Potongan then filed a complaint for illegal dismissal with NLRC against
corporation.
The Labor Arbiter dismissed the case on the ground that the action was barred by
prior judgment regarding the strike of union. Potongan then appealed, contending
that the Labor Arbiter did not acquire jurisdiction over him because he was not
even a member of the union. The NLRC set aside the Labor Arbiters decision and
directed respondent Potongan to go back to work.
The Labor Arbiter eventually dismissed Potongans complaint for lack of merit,
holding that, inter alia, Potongan should have reported back to work and/or
inquired into the results of the investigation of the charges against him; and that
the belated filing of his complaint partakes of a "fishing expedition."
On appeal, the NLRC affirmed the decision of the Labor Arbiter. The Court of
Appeals (CA) however, reversed the decision of NLRC holding that Potongan was
denied due process and was dismissed without cause.
ISSUE:
Whether or not the dismissal of Potongan was a valid exercise of management
prerogatives
HELD:
The Supreme Court recognizes that management has wide latitude to regulate,
according to its own discretion and judgment, all aspects of employment, including
the freedom to transfer and reassign employees according to the requirements of
its business. The scope and limits of the exercise of management prerogatives,
must, however, be balanced against the security of tenure given to labor.
27
If exercised in good faith for the purpose of advancing business interests, not of
defeating or circumventing the rights of employees, the managerial prerogative to
transfer personnel from one area of operation to another is justified.
The Supreme Court finds it difficult, however, to attribute good faith on the part of
Dynamic. Potongan was instructed to go on indefinite leave. He was asked to
return to work only after more than three years from the time he was instructed to
go on indefinite leave during which period his salaries were withheld, and only
after the NLRC promulgated its decision of May 21, 1998 reversing the labor
arbiters dismissal of his complaint.
ARNULFO O. ENDICO v. QUANTUM DISTRIBUTION CENTER
577 SCRA 299 (2009), FIRST DIVISION (Carpio Morales, J.)
The right of employees to security of tenure does not give them vested rights to
their positions to the extent of depriving management of its prerogative to change
their assignments or to transfer them.
Quantum Foods Center hired Arnulfo O. Endico (Endico) as Field Supervisor of
Davao City. He was later on transferred in Cebu. Due to Endicos achievements
and contributions to Quantum Foods, he was promoted as Area Manager of Cebu.
However, after fruitful years of employment, Quantum Foods was adversely
affected by economic slowdown, which compelled it to streamline its operations
through the reduction of the companys contractual merchandisers to save on
operation cost. Thereafter, for some misfortunate events, Endico was immediately
relieved from service. Endico thereafter filed a complaint for constructive illegal
dismissal.
The Labor Arbiter rendered a decision in Endicos favor. Quantum Foods appealed
to the National Labor Relations Commission (NLRC) which affirmed the Labor
Arbiters decision with modification. Quantum Foods then filed a Petition for
Certiorari before the Court of Appeals (CA) who ruled in favor of Quantum Foods.
The Court of Appeals ruled that Quantum Foods had yet to decide on the
administrative case when Endico immediately filed the complaint for constructive
dismissal. The CA concluded that Endico filed the complaint in anticipation of what
he perceived to be the final outcome of the administrative investigation. Hence,
this petition.
ISSUE:
Whether or not Endico was constructively dismissed
HELD:
Jurisprudence recognizes the exercise of management prerogatives. Labor laws
also discourage interference with an employers judgment in the conduct of its
business. For this reason, the Court often declines to interfere in legitimate
business decisions of employers. The law must protect not only the welfare of
employees, but also the right of employers.
In the pursuit of its legitimate business interests, especially during adverse
business conditions, management has the prerogative to transfer or assign
employees from one office or area of operation to another provided there is no
demotion in rank or diminution of salary, benefits and other privileges and the
action is not motivated by discrimination, bad faith, or effected as a form of
punishment or demotion without sufficient cause. This privilege is inherent in the
right of employers to control and manage their enterprises effectively. The right of
28
employees to security of tenure does not give them vested rights to their positions
to the extent of depriving management of its prerogative to change their
assignments or to transfer them.
Managerial prerogatives, however, are subject to limitations provided by law,
collective bargaining agreements, and general principles of fair play and justice.
In this case, the Court finds no reason to disturb the conclusion of the CA that
there was no constructive dismissal. Reassignments made by management
pending investigation of violations of company policies and procedures allegedly
committed by an employee fall within the ambit of management prerogative. The
decision of Quantum Foods to transfer Endico pending investigation was a valid
exercise of management prerogative to discipline its employees. The transfer,
while incidental to the charges against Endico, was not meant as a penalty, but
rather as a preventive measure to avoid further loss of sales and the destruction of
Quantum Foods image and goodwill. It was not designed to be the culmination of
the then on-going administrative investigation against Endico.
Neither was there any demotion in rank or any diminution of Endicos salary,
privileges and other benefits. Endico was being transferred to the head office as
area sales manager, the same position
Endico held in Cebu. There was also no proof that the transfer involved a
diminution of Endicos salary, privileges and other benefits.
On the alleged inconvenience on Endico and his family because of the transfer
from Cebu to the head office in Paraaque, the Court rules that the transfer is
valid, there being no showing that there was bad faith on the part of Quantum
Foods. Moreover, the Court finds that Quantum Foods, considering the declining
sales and the loss of a major account in Cebu, was acting in the legitimate pursuit
of what it considered its best interest in deciding to transfer Endico to the head
office.
FE LA ROSA, et al. v. AMBASSADOR HOTEL
Case law holds that constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee.
Petitioners Fe La Rosa, Ofelia Velez, Cely Domingo, Jona Natividad and Edgar De
Leon (La Rosa, et al.), were employees of respondent Ambassador Hotel. La Rosa,
et al. filed before the National Labor Relations Commission (NLRC) several
complaints for illegal dismissal, illegal suspension, and illegal deductions against
the hotel and its manager. La Rosa, et al. alleged that after filing their complaints
with the Department of Labor, the latter inspected the hotels premises. The hotel
was thereafter found to have been violating labor standards laws. Consequently,
after such incident, the management of the hotel retaliated by suspending and/or
constructively dismissing them by drastically reducing their work days through the
adoption of a work reduction/rotation scheme. The hotel however countered that
such reduction/rotation scheme was an exercise of its management prerogative
due to business losses.
The labor arbiter found the hotel and its manager guilty of illegal dismissal. The
hotel appealed to the NLRC but the latter affirmed the labor arbiters ruling with
29
modification. The hotel appealed and prayed for the issuance of an injunctive writ
before the Court of Appeals. The appellate court reversed the NLRC decision and
dismissed the petitioners complaints, stating that there was no constructive
dismissal.
ISSUES:
Whether or not La Rosa et al. were constructively dismissed
HELD:
The records fail, however, to show any documentary proof that the work reduction
scheme was adopted due to Ambassadors business reverses. The hotels
memorandum dated April 5, 2000 (sic, should be 2002) informing La Rosa et al. of
the adoption of a two-day work scheme effective April 5, 2002 made no mention
why such scheme was being adopted. Neither do the records show any
documentary proof that the hotel suffered financial losses to justify its adoption of
the said scheme to stabilize its operations.
What is undisputed, as found by both the labor arbiter and the NLRC and admitted
by respondent itself, is that the complaints for violation of labor standards laws
were filed by La Rosa et al. against Ambassador Hotel at the DOLE-NCR, some of
which complaints were partially settled; and that almost immediately after the
partial settlement of the said complaints, the work reduction/rotation scheme was
implemented.
Case law holds that constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee. The hotels sudden, arbitrary and unfounded adoption of the two-day
work scheme which greatly reduced La Rosa, et al.s salaries renders it liable for
constructive dismissal. Upon the other hand, La Rosa et al.s immediate filing of
complaints for illegal suspension and illegal dismissal after the implementation of
the questioned work scheme, which scheme was adopted soon after petitioners
complaints against respondent for violation of labor standards laws were found
meritorious, negates respondents claim of abandonment. An employee who takes
steps to protest his dismissal cannot by logic be said to have abandoned his work.
ADELINO FELIX v. NATIONAL LABOR RELATIONS COMMISSION and
REPUBLIC ASAHI GLASS CORPORATION
Substantial evidence must support the dismissal of an employee on the ground of
loss of trust and confidence.
Petitioner Adelino Felix was hired by the Republic Asahi Glass Corporation as a
Cadet Engineer. Sometime in 1992, Felix was offered a chance to train and qualify
for the position of Assistant Manager but he declined and waived the opportunity
to the one who was next-in-line. By Felix's claim, he was asked by certain officers
of the company to resign and accept a separation package, failing which he would
be terminated for loss of confidence.
Felix, however, refused to resign and accept separation benefits, drawing the
officers of the company to, by his claim, start harassing him. Thus, he was not
given work and another employee, Mr. Elmer Tacata, was assigned to take over his
post and function. Unable to withstand the manner by which he was being treated
30
by the company, Felix, through his lawyer, warned the Republic Asahi Glass
Corporation about the illegality of its actions. Felix attributed the company's
harassment against him to his being a member of the supervisory union then being
formed. The Republic Asahi Glass Corporation subsequently terminated Felixx
services for loss of trust and confidence.
Felix thus lodged a complaint for illegal dismissal. The Labor Arbiter dismissed
Felix's complaint. On appeal, the National Labor Relations Commission (NLRC)
dismissed Felix's complaint for lack of merit. The Court of Appeals likewise
dismissed the complaint.
ISSUE:
Whether or not the companys loss of trust and confidence is founded on facts
established by substantial and competent evidence
HELD:
The rule is that high respect is accorded to the findings of fact of quasi-judicial
agencies, more so in the case at bar where both the Labor Arbiter and the NLRC
share the same findings. The rule is not however, without exceptions one of which
is when the findings of fact of the labor officials on which the conclusion was
based are not supported by substantial evidence. The same is true when it is
perceived that far too much is concluded, inferred or deducted from bare facts
adduced in evidence.
The employers evidence, although not required to be of such degree as that
required in criminal cases i.e. proof beyond reasonable doubt, must be substantial
it must clearly and convincingly establish the facts upon which loss of confidence
in the employee may be made to rest. In the case at bar, the company failed to
discharge this burden.
Felix was hastily dismissed by ASAHI as the former was not given adequate time
to prepare for his defense but was preemptorily dismissed even without any formal
investigation or hearing. It is settled that where the employee denies the charges
against him, a hearing is necessary to thresh out any doubt. The failure of the
company to give petitioner, who denied the charges against him, the benefit of a
hearing and an investigation before his termination constitutes an infringement of
his constitutional right to due process.
It bears emphasis that the matter of determining whether the cause for dismissal
is justified on the ground of loss of confidence cannot be left entirely to the
employer. Impartial tribunals do not only rely on the statement made by the
employer that there is loss of confidence unless duly proved or sufficiently
substantiated. At all events, even if all the allegations are true, they are not of
such nature to merit the penalty of dismissal given the 14 years in service of Felix.
Dismissal is unduly harsh and grossly disproportionate to the charges. This rule on
proportionality that the penalty imposed should commensurate to the gravity of
the offense has been observed in a number of cases.
There being no basis in law or in fact justifying Felixs dismissal on the basis of
loss of trust and confidence, his dismissal was illegal.
G & M (PHIL.), INC., v. WILLIE BATOMALAQUE
The burden of proving payment of monetary claims rests on the employer.
31
Abdul Aziz Abdullah Al Muhaimid Najad Car Maintenance Association (Abdul Aziz)
hired Willie Batomalaque as car painter through a recruiter and agent petitioner G
& M Phil., Inc. (G&M). Their contract is for 2 years.
Batomalaque started working on March 10, 1992, but on June 7, 1994, he was
repatriated. He then filed a complaint against G&M, Abdul Aziz and Country
Empire Insurance Company for non-payment and underpayment of salaries and
damages with the Philippine Overseas Employment Administration (POEA). The
Labor Arbiter (LA) credited Batomalaques complaint for underpayment of salaries
during the first year of his contract but denied his other claims, and ordered G&M
and other defendants to pay Batomalaque. On appeal, the National Labor
Relations Commission affirmed the decision of the LA.
ISSUE:
Whether or not G&M has the obligation to prove that Batomalaque was paid his
salaries in full
HELD:
Specifically with respect to labor cases, the burden of proving payment of
monetary claims rests on the employer, the rationale being that the pertinent
personnel files, payrolls, records, remittances and other similar documents
which will show that overtime, differentials, service incentive leave and other
claims of workers have been paid are not in the possession of the worker but in
the custody and absolute control of the employer.
Aside, however, from its bare allegation that its principal Abdul Aziz had fully paid
Batomalaques salaries, G&M did not present any evidence, e.g., payroll or
payslips, to support its defense of payment. G&M thus failed to discharge the onus
probandi. G&M, as the recruiter and agent of Abdul Aziz, is thus solidarily liable
with the latter for the unpaid wages of Batomalaque.
On repeated occasions, the Court ruled that the debtor has the burden of showing
with legal certainty that the obligation has been discharged by payment. To
discharge means to extinguish an obligation, and in contract law discharge occurs
either when the parties have performed their obligations in the contract, or when
an event the conduct of the parties, or the operation of law releases the parties
from performing. Thus, a party who alleges that an obligation has been
extinguished must prove facts or acts giving rise to the extinction.
The fact of underpayment does not shift the burden of evidence to Batomalaque
because partial payment does not extinguish the obligation. Only when the debtor
introduces evidence that the obligation has been extinguished does the burden of
evidence shift to the creditor who is then under a duty of producing evidence to
show why payment does not extinguish the obligation.
LUNESA O. LANSANGAN AND ROCITA CENDAA v. AMKOR TECHNOLOGY
PHILIPPINES
Payment of backwages and other benefits is justified only if the employee was
unjustly dismissed.
An email was sent to Amkor Technology Philippines (Amkor) through their General
Manager alleging that the Lunesa Lansangan (Lansangan) and Rocita Cendana
(Cendana) stole company time. Lansangan and Cendana admitted to the
32
wrongdoing and were terminated for extremely serious offenses. The two then
filed a case of illegal dismissal against Amkor. The Labor Arbiter (LA) ordered for
their reinstatement to their former positions without backwages, but dismissed the
complaint on basis of Lansangan and Cendanas guilt. The two did not appeal the
finding that they were guilty, and moved for the writ of execution. Amkor appealed
the decision to the National Labor Relations Commissions (NLRC) and was
subsequently granted. The NLRC deleted the grant for reinstatement of the LA.
The Court of Appeals affirmed the decision of the NLRC that Lansangan and
Cendana are guilty and should not be reinstated but modified in so far as
backwages are concerned that it must be paid in full.
ISSUE:
Whether or not Lansangan and Cendana are entitled to backwages and
reinstatement
HELD:
The Arbiter found Lansangan and Cendanas dismissal to be valid. Such finding
had, as stated earlier, become final, they not having appealed it. Lansangan and
Cendanas are not entitled to full backwages as their dismissal was not found to be
illegal. Agabon v. NLRC so states payment of backwages and other benefits is
justified only if the employee was unjustly dismissed.
PANFILO MACASERO v. SOUTHERN INDUSTRIAL GASES PHILIPPINES
and/or NEIL LINDSAY
An illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. In instances where reinstatement is no longer feasible, separation
pay is granted. In effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or if not, separation pay and backwages.
Panfilo Macasero works as Carbon Dioxide Bulk Tank Escort for Southern
Industrial Gases, Philippines (SIGP). He was severed from his job for the reason
that his services were no longer needed. Macasero filed a case of illegal dismissal
against SIGP before the Labor Arbiter (LA) who ruled that he is considered a
regular employee but was not illegally dismissed and that he is entitled to
separation pay equivalent to 1 month for every year of service plus 13th month
pay.
The National Labor Relations Commission (NLRC) affirmed the decision of the LA
but modified the computation for the separation pay. The Court of Appeals (CA)
also affirmed the decision of the NLRC.
ISSUE:
Whether or not Macasero is illegally dismissed and is entitled to separation pay
HELD:
While both labor tribunals and the appellate court held that Macasero failed to
prove the fact of his dismissal, they oddly ordered the award of separation pay in
lieu of reinstatement in light of SIGP companys "firm stance that Macasero was
not its employee vis a vis the unflinching assertion of Macasero that he was which
does not create a fertile ground for reinstatement." It goes without saying that the
award of separation pay is inconsistent with a finding that there was no illegal
dismissal, for under Article 279 of the Labor Code and as held in a catena of cases,
an employee who is dismissed without just cause and without due process is
33
entitled to backwages and reinstatement or payment of separation pay in lieu

thereof.
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and backwages.
The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties.
Separation pay in lieu of reinstatement may likewise be awarded if the employee
decides not to be reinstated.
34
Reynaldo Madrigalejos v. Geminilou Trucking Service Liberty Galotera et

al.
G. R. No. 179174, 24 December 2008, SECOND DIVISION (Carpio-Morales,
J.)
The test of constructive dismissal is whether a reasonable person in the
employee's position would have felt compelled to give up his job under the
circumstances.
Reynaldo Madrigalejos was hired by Geminilou Trucking Service Liberty Galotera
as a truck driver to haul and deliver products of San Miguel Pure Foods Company,
Inc. Madrigalejos claimed that he was requested by Geminilou Trucking Service
Liberty Galotera et al. to sign a contract entitled Kasunduan Sa Pag-Upa ng
Serbisyo which he refused as he found it to alter his status as a regular employee
to merely contractual, and it contained a waiver of benefits that had accrued since
he started working for respondents.
Claiming that he was terminated by not signing the Kasunduan, Madrigalejos filed
with the National Labor Relations Commission (NRLC) a complaint for
constructive dismissal against Geminilou Trucking Service Liberty Galotera et al.
Geminilou Trucking Service Liberty Galotera et al. denied dismissing Madrigalejos
from his employment, explaining that he unilaterally decided to stop reporting for
work, following the filing by a fellow driver of a complaint against him for
allegedly attacking his fellow driver with a knife.
The Labor Arbiter declared that Madrigalejos had been illegally dismissed. The
NLRC reversed the Decision ruling that there was no termination of employment.
The appellate court denied petitioners appeal finding that even assuming that
Madrigalejos was required but refused to sign the Kasunduan, his refusal does not
per se adequately support the charge of dismissal. The appellate court added that
while technical rules on evidence are not strictly followed in the NLRC, a charge of
dismissal must still be supported by substantial evidence at the very least, or such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.
ISSUE:
Whether or not the employer bears the burden of proof to show that there was
unjustified refusal to report for work
HELD:
The Court's examination of the records reveals that the factual findings of the
NLRC, as affirmed by the appellate court, are supported by substantial evidence,
hence, there is no cogent reason for the Court to modify or reverse the same.
Constructive dismissal is a cessation of work because continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank
or diminution in pay or both; or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee. The test of
constructive dismissal is whether a reasonable person in the employee's position
would have felt compelled to give up his job under the circumstances.
In the present case, the records on hand show that the lone piece of evidence
submitted by petitioner to substantiate his claim of constructive dismissal is an
unsigned copy of the Kasunduan. This falls way short of the required quantum of
proof which, as the appellate court pointed out, is substantial evidence, or such
35
relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.
Under the circumstances, the Court finds that the appellate court did not err in
sustaining Geminilou Trucking Service Liberty Galotera et als claim that
Madrigalejos was not dismissed, but that he simply failed to report for work after
an altercation with a fellow driver, which incident was the subject of conciliation
proceedings before the Sangguniang Barangay.
36
MAJURINE L. MAURICIO v. NATIONAL LABOR RELATIONS COMMISSION,

et al.
475 SCRA 323 (2005), THIRD DIVISION (Carpio Morales J.)
One of the inherent powers of courts which should apply in equal force to quasijudicial bodies is to amend and control its processes so as to make them
conformable to law and justice. This includes the right to reverse itself, especially
when in its opinion it has committed an error or mistake in judgment and
adherence to its decision would cause injustice.
Majurine L. Mauricio (Majurine) started working as an Administrative Assistant in
the Legal Department of the Manila Banking Corporation as a probationary
employee. As a pre-employment requirement, the bank directed the submission by
Mauricio of some required documents. However, she failed to do so. She was
advised that the processing of her regularization as employee would be held in
abeyance. The bank gave her extension dates twice with information that her
failure to do so would cause the termination of her employment. Despite the
deadline given her, she still failed to comply with the requirements.
Mauricio, informed the bank that she could not secure a clearance from her
previous employer, the Manila Bankers Life Insurance Corporation (MBLIC), a
sister company of the bank, as she had a pending case with it. She requested that
any action relative to her employment be held in abeyance as she was still
following up the early resolution of the case. In response, the bank denied her
request. Thus, she filed a complaint for illegal dismissal, unpaid salary, and moral
and exemplary damages against the bank before the Labor Arbiter, but such was
dismissed.
On Mauricios appeal, the National Labor Relations Commission (NLRC), reversed
the decision of the Labor Arbiter (LA). On the banks Motion for Reconsideration,
however, the NLRC, reinstated in toto the Decision of the LA. Mauricio thereupon
challenged via Certiorari under Rule 65 before the Court of Appeals (CA). The CA
affirmed the NLRC decision.
ISSUE
Whether or not NLRC committed grave abuse of discretion when it reversed its
original Decision and reinstated in toto Decision of the Labor Arbiter
HELD
There is nothing radical and highly questionable with the NLRC reversing its
original decision if supported with substantial evidence. Respecting Mauricios
contention that in its earlier Decision, the NLRC already passed upon the
arguments raised by respondents in their Motion for Reconsideration before it,
Mauricio herself provides the answer when she quotes in her present petition
what she terms as the trenchant observation of the High Court.
In her petition, while Mauricio quotes at length the September 24, 2001 original
decision of the NLRC, she fails to explain why the NLRC should not have reversed
it and why the Court of Appeals should not have sustained the reversal. And what
error of law should be reviewed by this Court, Mauricio likewise fails to point out.
One of the inherent powers of courts which should apply in equal force to quasijudicial bodies is to amend and control its processes so as to make them
conformable to law and justice. This includes the right to reverse itself,
especially when in its opinion it has committed an error or mistake in judgment
and adherence to its decision would cause injustice. This, the NLRC exercised
37
which bore the imprimatur of the CA. Mauricio has, however, failed to advance any
meritorious ground why the Court should disturb such exercise.
MCDONALDS (KATIPUNAN BRANCH), et al. v. MA. DULCE ALBA
Violation of established rules and policies, to be considered serious misconduct,
should be performed with wrongful intent.
Ma. Dulce Alba (Alba) was hired as part of the service crew of McDonalds
Katipunan Branch. During the orientation of newly hired employees, McDonalds
provided Alba with a copy of the Crew Employee Handbook on rules and
regulations including its meal policies, which state that an employee was not
permitted to eat inside the crew room while on duty, and that doing so would
result in summary dismissal.
Rizza Santiago (Santiago), another crew member, reported to the store manager
Kit Alvarez (Alvarez) that she witnessed Alba eating inside the crew room during
her duty. McDonalds thus suspended Alba for five days because of the incident.
When asked about it, Alba explained that she did indeed ate inside the crew room
but that it was only because she was had a stomach ache due to hunger.
Nevertheless, McDonalds found Alba guilty of flouting company regulations and
immediately terminated her services. Alba thus lodged a complaint against
McDonalds before the National Labor Relations Commission (NLRC) which
dismissed it without prejudice.
Alba re-filed her complaint, and after submission of the parties respective position
papers and responsive pleadings, Labor Arbiter Pablo Espiritu Jr. found in favor of
Alba, holding that while she violated the meal policy of McDonalds, dismissal was
too harsh a penalty, and suspension without pay would have sufficed. McDonalds
appealed the finding of the Labor Arbiter to the NLRC, which denied the same.
ISSUE:
Whether or not the violation of the meal policy amounts to serious or willful
misconduct which would justify dismissal
HELD:
There is no dispute that Alba violated McDonalds meal policy. The only issue is
whether such violation amounts to or borders on "serious or willful" misconduct or
willful disobedience, as petitioners posit, to call for respondents dismissal. By any
measure, the Supreme Court holds not.
With respect to serious misconduct, it is not sufficient that the act or the conduct
complained of must have violated some established rules or policies. It must have
been performed with wrongful intent.
McDonalds, on which the onus of proving lawful cause in sustaining the dismissal
of Alba lies, failed to prove that her misconduct was induced by a perverse and
wrongful intent, they having merely anchored their claim that she was on her
knowledge of the meal policy.
While McDonalds wields a wide latitude of discretion in the promulgation of
policies, rules and regulations on work-related activities of its employees, these
must, however, be fair and reasonable at all times, and the corresponding
sanctions for violations thereof, when prescribed, must be commensurate thereto
as well as to the degree of the infraction. Given Albas claim that she was having
stomach pains due to hunger, which is not implausible, the same should have been
38
properly taken into account in the imposition of the appropriate penalty for
violation of the meal policy. McDonalds suspension for five days sufficed. With
that penalty, the necessity of cautioning other employees who may be wont to
violate the same policy was not compromised.
Moreover, McDonalds likewise failed to prove any resultant material damage or
prejudice on their part as a consequence of respondent's questioned act. Their
claim that the act would cause "irremediable harm to the companys business" is
too vague to merit consideration.
MILAGROS PANUNCILLO v. CAP PHILIPPINES, INC.
The protection of the rights of the laborers does not authorize the oppression or
self-destruction of the employer.
Milagros Panuncillo was hired as Office Senior Clerk by CAP Philippines Inc. In
order to secure the education of her son, Panuncillo procured an educational plan
which she had fully paid but which she later sold to Josefina Pernes for P37,000.
Before the actual transfer of the plan could be effected, however, Panuncillo
pledged it for P50,000 to John Chua who, however, sold it to Benito Bonghanoy.
Bonghanoy in turn sold the plan to Gaudioso R. Uy for P60,000.
Having gotten wind of the transactions subsequent to her purchase of the plan,
Josefina informed CAP Philippines Inc. that Panuncillo had "swindled" her but that
she was willing to settle the case amicably as long as Panuncillo will pay the
amount involved and the interest.
CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo sought
reconsideration of her dismissal. Acting on Panuncillos motion for
reconsideration, CAP Philippines Inc. denied the same. Panuncillo thus filed a
complaint for illegal dismissal, 13th month pay, service incentive leave pay,
damages and attorneys fees against CAP Philippines Inc.
The Labor Arbiter, while finding that the dismissal was for a valid cause, found the
same too harsh. He thus ordered the reinstatement of Panuncillo to a position one
rank lower than her previous position. On appeal, the National Labor Relations
Commission (NLRC) reversed the decision of the Labor Arbiter. It held that
Panuncillos dismissal was illegal and accordingly ordered her reinstatement to
her former position.
CAP Philippines Inc. challenged the NLRC Decision before the appellate court via
Petition for Certiorari. The appellate court reversed the NLRC Decision and held
that the dismissal was valid and that CAP Philippines Inc. complied with the
procedural requirements of due process. Hence, the present petition.
ISSUE:
Whether or not Milagros has been illegally dismissed
HELD:
Panuncillos repeated violation of Section 8.4 of CAP Philippines Incs Code of
Discipline, she violated the trust and confidence of CAP Philippines Inc. and its
customers. To allow her to continue with her employment puts CAP Philippines
Inc. under the risk of being embroiled in unnecessary lawsuits from customers
similarly situated as Josefina, et al. Clearly, CAP Philippines Inc. exercised its
management prerogative when it dismissed Panuncillo.
39
Under the Labor Code, the employer may terminate an employment on the ground
of serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work. Infractions of
company rules and regulations have been declared to belong to this category and
thus are valid causes for termination of employment by the employer.
The employer cannot be compelled to continue the employment of a person who
was found guilty of maliciously committing acts which are detrimental to his
interests. It will be highly prejudicial to the interests of the employer to impose on
him the charges that warranted his dismissal from employment. Indeed, it will
demoralize the rank and file if the undeserving, if not undesirable, remain in the
service. It may encourage him to do even worse and will render a mockery of the
rules of discipline that employees are required to observe. This Court was more
emphatic in holding that in protecting the rights of the laborer, it cannot authorize
the oppression or self-destruction of the employer.
There can thus be no doubt that Panuncillo was given ample opportunity to explain
her side. Parenthetically, when an employee admits the acts complained of, as in
Panuncillos case, no formal hearing is even necessary.
NOEL E. MORA v. AVESCO MARKETING CORPORATION
Voluntary resignations being unconditional in nature, both the intent and the overt
act of relinquishment should concur.
Noel E. Mora (Mora) was hired as a sales engineer at herein respondent, Avesco
Marketing Corporation (Avesco). He tendered a letter of resignation after being
confronted for selling competitors products to the prejudice and detriment of
Avesco and was given the option of either immediately resigning or face
administrative charges. He consequently changed his mind and withdrew his letter
of resignation on the same day. The following day, Avescos personnel manager
issued a notice of disciplinary action. Mora has not heard anything from the
Avesco and thereafter learned from third party sources that his employment had
been terminated.
Mora filed a complaint for illegal dismissal before the National Labor Relations
Commission (NLRC) but was dismissed for lack of jurisdiction since the dispute
falls within the province of the grievance procedure provided for by the Collective
Bargaining Agreement between Avesco and the workers union. The case was thus
referred to National Conciliation and Mediation Board for voluntary arbitration
which dismissed Mora's complaint upon the ground that he had voluntarily
resigned prompting him to file a petition for certiorari before the Court of Appeals
which denied the same, it similarly finding him to have voluntarily resigned from
his job.
ISSUE:
Whether or not Mora was voluntarily resigned from his job
HELD:
Voluntary resignations being unconditional in nature, both the intent and the overt
act of relinquishment should concur. If the employer introduces evidence
purportedly executed by an employee as proof of voluntary resignation yet the
employee specifically denies such evidence, as in Mora's case, the employer is
40
burdened to prove the due execution and genuineness of such evidence. Avesco in
this case failed to discharge such burden.
For a resignation tendered by an employee to take effect, it should first be
accepted or approved by the employer. Moras receipt by Avescos personnel
department of his resignation letter is not equivalent to approval. Since Mora
requested that his resignation was to be effective a month later or on April 25,
2003, Avescos approval was a fortiori necessary. That Avesco issued the show
cause letter a day after Mora filed the controversial letter of resignation could
only mean that it did not accept the same.
While selling of Avescos competitors products is a valid ground for termination of
employment, an employer cannot just hurl generalized accusations but should at
least cite specific instances and proof in support thereof. Avesco relied on a
report by [Moras] superiors in faulting Mora. What this alleged report was
and what it contained, no testimonial or documentary proof thereof was proffered.
And while Avesco gave the impression that it conducted or was going to conduct
an investigation on the basis of the report, there is no showing that one such
was conducted and, if there was, what the result was.
ANICETO W. NAGUIT JR. v. NATIONAL LABOR
RELATIONS COMMISSION, et al.
In order for affidavits to be admissible as evidence, the Labor Code provides that
the adverse party should be given opportunity to cross-examine the affiants.
Petitioner Aniceto Naguit was employed as an administrative officer of the Manila
Electric Company (MERALCO). Naguit rendered overtime work 8am to 12pm.
Upon the preparation of his timesheet, it was reflected that he worked until 5pm
instead of 12pm. Naguit did not inform the timekeeper of this fact. Furthermore,
Naguit being the custodian of petty cash, released to Fidel Cabuhat the amount
representing meal allowance and rental for a jeep covering his alleged overtime
work. Two years later, he was charged with violating company policy because of
said incident. In the administrative hearing, MERALCOs evidence consisted
primarily of the sworn statements of Cabuhat alleging that he was induced by
Naguit to falsify the time cards. Naguit was dismissed after 32 years of service.
Naguit appealed his dismissal. The Labor Arbiter rendered decision in favor of
Naguit. On appeal, the National Labor Relations Commission (NLRC) reversed the
decision of the Labor Arbiter. The Court of Appeals affirmed the NLRCs decision.
Issue:
Whether or not the NLRC erred in giving full credence to the affidavit of Cabuhat
Held:
In fine, the Court credits that Naguit was in good faith when he did not correct the
entry in the Notice of Overtime and Timesheet reflecting that he worked up to
5:00 p.m. on June 6, 1987. The charge of falsification against him does not thus lie.
In labor cases, the Court has consistently held that where the adverse party is
deprived of opportunity to cross-examine the affiants, affidavits are generally
rejected for being hearsay, unless the affiant themselves are placed on the witness
stand to testify thereon. Thusly, such affidavits of Cabuhat are inadmissible as
evidence against Naguit.
41
Naguit contends that the NLRC committed grave abuse of discretion in giving full
credence to the affidavits
of Cabuhat claiming that he was induced by Naguit to claim overtime pay despite
Cabuhat's failure to affirm them during the arbitral proceedings, he having failed
to show up, thus making them inadmissible under the hearsay rule.
NEW SUNRISE METAL CONSTRUCTION, et al. v. VICTOR PIA, et al.
Unsatisfactory performance, under the Labor Code, must be gross and habitual to
constitute just cause for dismissal.
Victor Pia, et al. were hired by New Sunrise under separate 6-month contracts but
their services were subsequently terminated even before the expiration of said
contract due to alleged poor performance. Pia, et al. filed a complainant for illegal
dismissal and underpayment of wages as well as non-payment of other benefits
before the Labor Arbiter. The Labor Arbiter ruled in favor of Pia, et al New Sunrise
was ordered to pay Pia, et al. their proportionate 13th month pay and
corresponding salaries for the unexpired portion.
New sunrise appealed to the National Labor and Relations Commission (NLRC)
but NLRC dismissed the appeal. A motion for reconsideration was filed. The NLRC
reversed its resolution finding the dismissal to be based on just cause. On appeal,
the Court of Appeals affirmed the Labor Arbiters decision. Hence, this petition.
ISSUE:
Whether or not incompetence or poor performance, not amounting to gross and
habitual neglect of duties, can be a valid cause for termination of employment
HELD:
The Supreme Court upheld the decision of the Labor Arbiter positing that at all
events, unsatisfactory performance cannot be considered a just cause for dismissal
under the Labor Code if it does not amount to gross and habitual neglect of duties.
On this score, New Sunrise failed to prove that the alleged inefficiency of the 12
respondents amounted to gross and habitual neglect of duties.
There is no denying that the unsatisfactory performance of the employees were
proven in the report provided by New Sunrise but sad to say, it is not enough proof
that it amounted to gross and habitual neglect of duties.
Further, New Sunrise failed to establish that they were informed, at the time of
hiring, of the standards they were expected to meet, i.e., that they were supposed
to reach certain quotas. This is not to mention that New Sunrise failed to present
proof that respondents were apprised of their poor or below average performance
after each evaluation period to at least give them the opportunity to improve their
performance.
RONALDO NICOL et al. v. FOOT JOY INDUSTRIAL CORP. et al.
The New Rules of Procedure of the NLRC, as amended, allows the reduction of the
appeal bond.
News of a temporary shutdown of respondent Foot Joy Industrial Corp. came about
on February 2, 2001. Two days after, a fire razed the company and its premises.
Subsequently, the employees filed with the National Labor Relations Commission
42
(NLRC) two separate complaints for illegal closure resulting to illegal dismissal
and nonpayment of wage increase. The company declared the total closure and
cessation of its business operations allegedly because of severe losses and notified
the employees that they shall be terminated from employment. The Labor Arbiter
(LA) found Ronaldo Nicol, et al. were constructively dismissed and awarded them
separation pay.
Foot Joy filed a Motion to Reduce Bond with their appeal to the NLRC but the
Motion was denied. As Foot Joy failed to post the additional bond the NLRC
dismissed Foot Joys appeal for non-perfection thereof.
On appeal, the Court of Appeals (CA) reversed the NLRC.
ISSUE:
Whether or not a motion to reduce the appeal bond can be given due course even
if it is not accompanied by a bond in a reasonable amount
HELD:
It is provided in Article 223 of the Labor Code that in case of a judgment involving
a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in
the judgment appealed from.
Also, Sections 4(a) of Rule VI of the New Rules of Procedure of the NLRC the
states that one of the requisites for perfection of appeal is that it shall be filed with
proof of payment of the required appeal fee and surety bond as provided in
Section 6 of the Rule. Section 6 provides that In case the decision of the Labor
Arbiter or the Regional Director involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond. The
appeal bond shall either be in cash or surety in an amount equivalent to the
monetary award, exclusive of damages and attorneys fees.
The necessary import of the foregoing provisions is that in the case of an employer
appealing the labor arbiters decision to the NLRC, the posting of a cash or surety
bond to perfect an appeal of a monetary judgment is not only mandatory but also
jurisdictional, non-compliance with which has the effect of rendering the judgment
final and executory.
As stressed in Ong v. Court of Appeals, it is the intention of the lawmakers to make
the bond an indispensable requisite for the perfection of an appeal by the
employer.
Be that as it may, Section 6 of Rule VI of the New Rules of Procedure of the NLRC,
as amended, allows the reduction of the appeal bond. This practice-evolved rule
has been made explicit by Resolution 01-02, series of 2002, subject to the
conditions that (1) the motion to reduce the bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant, otherwise the filing of the motion to reduce bond shall not stop
the running of the period to perfect an appeal. There is no dispute that
respondents filed a Notice of Appeal and complied with the other requirements for
perfecting an appeal, save for the posting of the full amount of the bond, on
December 20, 2001 or nine days after receipt of the labor arbiters decision. And
admittedly, respondents Motion to Reduce Bond was accompanied by an actual
tender of a P10 million surety bond executed by the Security Pacific Assurance
Corporation.
43
PHILIPPINE AIRLINES, INC. v. ENRIQUE LIGAN, et al.

G.R. No. 146408, 30 April 2009, SPECIAL SECOND DIVISION (Carpio
Morales, J.)
It must be stressed that respondents, having been declared to be regular
employees, had acquired security of tenure. As such, they could only be dismissed
by the real employer, on the basis of just or authorized cause, and with observance
of procedural due process.
Enrique Ligan, et al. and the other respondents were employees of Synergy
Services Corporation (Synergy) which provides manpower for Philippine Airlines.
It was later discovered that Synergy is a labor-only contractor. They were
dismissed by Philippine Airlines on several grounds, one of which is in the guise of
retrenchment. The legality of the dismissal of the Ligan, et al. has been pending
before the Court of Appeals.
Philippine Airlines paid the wages of the Ligan, et al. but contested the
employment status of Roque Pilapil for he is already terminated and Benedicto
Auxtero who signed the Release and Quitclaim and Waiver. Philippine Airlines
therefore pleads to the court to reconsider its first Decision on the payment of
wages and benefits.
ISSUE:
Whether or not the Supreme Court shall overrule its first decision regarding the
grant of wages and benefits to Ligan, et al.
HELD:
In light of these recent manifestations-informations of the parties, the Court finds
that a modification of the Decision is in order, the claims with respect to Pilapil
and Auxtero having been deemed extinguished even before the promulgation of
the Decision. That Pilapil was a regular employee yields to the final finding of a
valid dismissal in the supervening case involving his own misconduct, while
Auxteros attempt at forum-shopping should not be countenanced.
IN ALL OTHER RESPECTS, the Court finds no sufficient reason to deviate from its
Decision, but proceeds, nonetheless, to clarify a few points. While this Courts
Decision ruled on the regular status of Ligan, et al., it must be deemed to be
without prejudice to the resolution of the issue of illegal dismissal in the proper
case.
Notably, subject of the Decision was Ligan, et al.s complaints for regularization
and under-/non-payment of benefits. The Court did not and could not take
cognizance of the validity of the eventual dismissal of Ligan, et al. because the
matter of just or authorized cause is beyond the issues of the case. That is why the
Court did not order reinstatement for such relief presupposes a finding of illegal
dismissal in the proper case which, as the parties now manifest, pends before the
appellate court.
All told, the pending illegal dismissal case in CA-G.R. SP No. 00922 may now take
its course. The Courts finding that Ligan, et al. are regular employees of PAL
neither frustrates nor preempts the appellate courts proceedings in resolving the
issue of retrenchment as an authorized cause for termination. If an authorized
cause for dismissal is later found to exist, PAL would still have to pay Ligan, et al.
their corresponding benefits and salary differential up to June 30, 1998.
Otherwise, if there is a finding of illegal dismissal, an order for reinstatement with
44
full backwages does not conflict with the Courts declaration of the regular
employee status of Ligan, et al.
LORNA DISING PUNZAL v. ETSI TECHNOLOGIES, INC., et al.
No matter how much the employee dislikes the employer professionally, he cannot
afford to be disrespectful.
Petitioner Lorna Dising Punzal (Punzal) had been working for respondent ETSI
Technologies, Inc. (ETSI) as Department Secretary. Punzal sent an e-mail message
to her officemates announcing the holding of a Halloween Party that was to be
held in the office. Her immediate superior, respondent Carmelo Remudaro advised
her to first secure the approval of the SVP, respondent Werner Geisert. When
Geisert did not approve of the plan, Punzal then sent a second e-mail to her
officemates that states Geisert was so unfair . . . para bang palagi siyang
iniisahan sa trabaho. . . Anyway, solohin na lang niya bukas ang office."
Punzals superiors required her to explain her actions which found such as
unacceptable. She was then dismissed from employment due to improper conduct
or act of discourtesy or disrespect and making malicious statements concerning
company officer. Punzal filed before the National Labor Relations Commission
(NLRC) a complaint for illegal dismissal against ETSI, Geisert, and Remudaro.
The complaint was dismissed by the Labor Arbiter. On appeal, the NLRC found
that while she was indeed guilty of misconduct, the penalty of dismissal was
disproportionate to her infraction. The Court of Appeals held that Punzals
dismissal was in order.
ISSUE:
Whether or not there was a valid cause to dismiss Punzal
HELD:
A cordial or, at the very least, civil attitude, according due deference to ones
superiors, is still observed, especially among high-ranking management officers.
The Court takes judicial notice of the Filipino values of pakikisama and paggalang
which are not only prevalent among members of a family and community but
within organizations as well, including work sites. An employee is expected to
extend due respect to management, the employer being the "proverbial hen that
lays the golden egg," so to speak. An aggrieved employee who wants to unburden
himself of his disappointments and frustrations in his job or relations with his
immediate superior would normally approach said superior directly or otherwise
ask some other officer possibly to mediate and discuss the problem with the end in
view of settling their differences without causing ferocious conflicts. No matter
how much the employee dislikes the employer professionally, and even if he is in a
confrontational disposition, he cannot afford to be disrespectful and dare to talk
with an unguarded tongue and/or with a bileful pen.
Punzal sent the e-mail message in reaction to Geiserts decision which he had all
the right to make. That it has been a tradition in ETSI to celebrate occasions such
as Christmas, birthdays, Halloween, and others does not remove Geiserts
prerogative to approve or disapprove plans to hold such celebrations in office
premises and during company time. Given the reasonableness of Geiserts decision
that provoked Punzal to send the second e-mail message, the observations of the
Court of Appeals that "the message x x x resounds of subversion and undermines
45
the authority and credibility of management" and that petitioner "displayed a

tendency to act without managements approval, and even against managements
will" are well taken.
RFM CORPORATION-FLOUR DIVISION and SFI FEEDS DIVISION v.
KASAPIAN NG MANGGA-GAWANG PINAGKAISA-RFM (KAMPI-NAFLUKMU) and SANDIGAN AT UGNAYAN NG MANGGAGAWANG PINAGKAISASFI (SUMAPI-NAFLU-KMU) 578 SCRA 34 (2009), SECOND DIVISION
If the terms of the Collective Bargaining Agreement are clear and leave no doubt
upon the intention of the contracting parties, its literal meaning shall prevail.
Petitioner RFM Corporation, a domestic corporation entered into collective
bargaining agreements (CBAs) with the Kasapian ng Manggagawang PinagkaisaRFM (KAMPI-NAFLU-KMU) and Sandigan at Ugnayan ng Manggagawang
Pinagkaisa-SFI (SUMAPI-NAFLU-KMU).
Under the CBA, RFM agreed to make payment to all daily paid employees on Black
Saturday, November 1 and December 31 if declared as special holidays by the
national government.
During the first year of the effectivity of the CBAs in 2000, December 31 which fell
on a Sunday was declared by the national government as a special holiday.
Respondent unions thus claimed payment of their members salaries, invoking the
CBA provision. RFM refused the claims for payment, averring that December 31,
2000 was not compensable as it was a rest day. The controversy resulted in a
deadlock, drawing the parties to submit the same for voluntary arbitration.
The Voluntary Arbitrator (VA) declared that the provision of the CBA is clear,
ruling in favor of KAMPI- NAFLU-KMU and SUMAPI-NAFLU-KMU and ordered
RFM to pay their salaries. The Court of Appeals (CA) affirmed the decision.
ISSUE:
Whether or not the employees are entitled to the questioned salary according to
the provision of the CBA
HELD:
If the terms of a CBA are clear and have no doubt upon the intention of the
contracting parties, as in the herein questioned provision, the literal meaning
thereof shall prevail. That is settled. As such, the daily-paid employees must be
paid their regular salaries on the holidays which are so declared by the national
government, regardless of whether they fall on rest days.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative
that the State shall afford protection to labor. Its purpose is not merely "to prevent
diminution of the monthly income of the workers on account of work interruptions.
In other words, although the worker is forced to take a rest, he earns what he
should earn, that is, his holiday pay."
The CBA is the law between the parties, hence, they are obliged to comply with its
provisions. Indeed, if petitioner and respondents intended the provision in
question to cover payment only during holidays falling on work or weekdays, it
should have been so incorporated therein.
RFM maintains, however, that the parties failed to foresee a situation where the
special holiday would fall on a rest day. The Court is not persuaded. The Labor
46
Code specifically enjoins that in case of doubt in the interpretation of any law or
provision affecting labor, it should be interpreted in favor of labor.
ROSA C. RODOLFO v. PEOPLE OF THE PHILIPPINES
Promises or offers for a fee employment is sufficient to warrant conviction for
illegal recruitment.
Petitioner Rosa C. Rodolfo approached private complainants Necitas Ferre and
Narciso Corpus individually and invited them to apply for overseas employment in
Dubai. Rodolfo, being their neighbor, Ferre and Corpus agreed and went to the
formers office. The office bore the business name Bayside Manpower Export
Specialist. In that office, Ferre gave P1,000.00 as processing fee and another
P4,000.00. Likewise, Corpus gave Rodolfo P7,000.00. Rodolfo then told Ferre and
Corpus that they were scheduled to leave for Dubai. However, private
complainants and all the other applicants were not able to depart on the scheduled
date as their employer allegedly did not arrive. Thus, their departure was
rescheduled, but the result was the same. Suspecting that they were being
hoodwinked, Ferre and Corpus demanded of Rodolfo to return their money. Except
for the refund of P1,000.00 to Ferre, Rodolfo was not able to return Ferres and
Corpus money. Ferre, Corpus and three others then filed a case for illegal
recruitment in large scale with the Regional Trial Court (RTC) against Rodolfo.
The RTC rendered judgement against Rodolfo but in imposing the penalty, the RTC
took note of the fact that while the information reflected the commission of illegal
recruitment in large scale, only the complaint of two (Ferre and Corpus) of the five
complainants was proven. Rodolfo appealed to the Court of Appeals (CA). The CA
dismissed the petition but modified the penalty imposed by the trial court. The CA
also dismissed Rodolfos Motion for Reconsideration.
ISSUE:
Whether or not Rodolfo is guilty of illegal recruitment in large scale
HELD:
The elements of the offense of illegal recruitment, which must concur, are: (1) that
the offender has no valid license or authority required by law to lawfully engage in
recruitment and placement of workers; and (2) that the offender undertakes any
activity within the meaning of recruitment and placement under Article 13(b), or
any prohibited practices enumerated under Article 34 of the Labor Code. If
another element is present that the accused commits the act against three or more
persons, individually or as a group, it becomes an illegal recruitment in a large
scale.
Article 13 (b) of the Labor Code defines recruitment and placement as [a]ny
act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not.
That the first element is present in the case at bar, there is no doubt. Jose
Valeriano, Senior Overseas Employment Officer of the Philippine Overseas
Employment Administration, testified that the records of the POEA do not show
that Rodolfo is authorized to recruit workers for overseas employment. A
Certification to that effect was in fact issued by Hermogenes C. Mateo, Chief of
the Licensing Division of POEA.
47
The second element is doubtless also present. The act of referral, which is
included in recruitment, is the act of passing along or forwarding of an applicant
for employment after an initial interview of a selected applicant for employment to
a selected employer, placement officer or bureau. Rodolfos admission that she
brought private complainants to the agency whose owner she knows and her
acceptance of fees including those for processing betrays her guilt.
Rodolfo issued provisional receipts indicating that the amounts she received from
the private complainants were turned over to Luzviminda Marcos and Florante
Hinahon does not free her from liability. For the act of recruitment may be for
profit or not. It is sufficient that the accused promises or offers for a fee
employment to warrant conviction for illegal recruitment. Parenthetically, why
Rodolfo accepted the payment of fees from the private complainants when, in light
of her claim that she merely brought them to the agency, she could have advised
them to directly pay the same to the agency, she proferred no explanation.
On Rodolfos reliance on Seoron, true, the Court held that issuance of receipts for
placement fees does not make a case for illegal recruitment. But it went on to
state that it is rather the undertaking of recruitment activities without the
necessary license or authority that makes a case for illegal recruitment.
SAN MIGUEL CORPORATION v. PROSPERO A. ABALLA et al.
The language of a contract disavowing the existence of an employer-employee
relationship is not determinative of the parties relationship. It is the totality of the
facts and surrounding circumstances of the case.
Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose
Cooperative (Sunflower) entered into a one-year Contract of Service and such
contract is renewed on a monthly basis until terminated. Pursuant to this,
respondent Prospero Aballa et al. rendered services to SMC.
After one year of rendering service, Aballa et al., filed a complaint before National
Labor Relations Commission (NLRC) praying that they be declared as regular
employees of SMC. On the other hand, SMC filed before the Department of Labor
and Employment (DOLE) a Notice of Closure due to serious business losses.
Hence, the labor arbiter dismissed the complaint and ruled in favor of SMC. Aballa
et al. then appealed before the NLRC. The NLRC dismissed the appeal finding that
Sunflower is an independent contractor.
On appeal, the Court of Appeals reversed NLRCs decision on the ground that the
agreement between SMC and Sunflower showed a clear intent to abstain from
establishing an employer-employee relationship.
ISSUE:
Whether or not Aballa et al. are employees of SMC
HELD:
The test to determine the existence of independent contractorship is whether one
claiming to be an independent contractor has contracted to do the work according
to his own methods and without being subject to the control of the employer,
except only as to the results of the work.
In legitimate labor contracting, the law creates an employer-employee relationship
for a limited purpose, i.e., to ensure that the employees are paid their wages. The
48
principal employer becomes jointly and severally liable with the job contractor,
only for the payment of the employees wages whenever the contractor fails to pay
the same. Other than that, the principal employer is not responsible for any claim
made by the employees.
In labor-only contracting, the statute creates an employer-employee relationship
for a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if such employees
had been directly employed by the principal employer.
The Contract of Services between SMC and Sunflower shows that the parties
clearly disavowed the existence of an employer-employee relationship between
SMC and private respondents. The language of a contract is not, however,
determinative of the parties relationship; rather it is the totality of the facts and
surrounding circumstances of the case. A party cannot dictate, by the mere
expedient of a unilateral declaration in a contract, the character of its business,
i.e., whether as labor-only contractor or job contractor, it being crucial that its
character be measured in terms of and determined by the criteria set by statute.
What appears is that Sunflower does not have substantial capitalization or
investment in the form of tools, equipment, machineries, work premises and other
materials to qualify it as an independent contractor. On the other hand, it is
gathered that the lot, building, machineries and all other working tools utilized by
Aballa et al. in carrying out their tasks were owned and provided by SMC.
And from the job description provided by SMC itself, the work assigned to Aballa
et al. was directly related to the aquaculture operations of SMC. As for janitorial
and messengerial services, that they are considered directly related to the
principal business of the employer has been jurisprudentially recognized.
Furthermore, Sunflower did not carry on an independent business or undertake
the performance of its service contract according to its own manner and method,
free from the control and supervision of its principal, SMC, its apparent role
having been merely to recruit persons to work for SMC.
All the foregoing considerations affirm by more than substantial evidence the
existence of an employer-employee relationship between SMC and Aballa et al.
Since Aballa et al. who were engaged in shrimp processing performed tasks
usually necessary or desirable in the aquaculture business of SMC, they should be
deemed regular employees of the latter and as such are entitled to all the benefits
and rights appurtenant to regular employment. They should thus be awarded
differential pay corresponding to the difference between the wages and benefits
given them and those accorded SMCs other regular employees.
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL
LABOR RELATIONS COMMISSION et al.
There is an implied revocation of an agency relationship when after the
termination of the original employment contract, the foreign principal directly
negotiated with the employee and entered into a new and separate employment
contract.
Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by
Sunace International Management Services (Sunace) under a 12-month contract.
Such employment was made with the assistance of Taiwanese broker Edmund
49
Wang. After the expiration of the contract, Montehermozo continued her

employment with her Taiwanese employer for another 2 years.
When Montehermozo returned to the Philippines, she filed a complaint against
Sunace, Wang, and her Taiwanese employer before the National Labor Relations
Commission (NLRC). She alleges that she was underpaid and was jailed for three
months in Taiwan. She further alleges that the 2-year extension of her employment
contract was with the consent and knowledge of Sunace. Sunace, on the other
hand, denied all the allegations.
The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable
thereof. The National Labor Relations Commission and Court of Appeals affirmed
the labor arbiters decision. Hence, the filing of this appeal.
ISSUE:
Whether or not the 2-year extension of Montehermozos employment was made
with the knowledge and consent of Sunace
HELD:
Contrary to the Court of Appeals finding, the alleged continuous communication
was with the Taiwanese broker Wang, not with the foreign employer.
The finding of the Court of Appeals solely on the basis of the telefax message
written by Wang to Sunace, that Sunace continually communicated with the
foreign "principal" (sic) and therefore was aware of and had consented to the
execution of the extension of the contract is misplaced. The message does not
provide evidence that Sunace was privy to the new contract executed after the
expiration on February 1, 1998 of the original contract. That Sunace and the
Taiwanese broker communicated regarding Montehermozos allegedly withheld
savings does not necessarily mean that Sunace ratified the extension of the
contract.
As can be seen from that letter communication, it was just an information given to
Sunace that Montehermozo had taken already her savings from her foreign
employer and that no deduction was made on her salary. It contains nothing about
the extension or Sunaces consent thereto.
Parenthetically, since the telefax message is dated February 21, 2000, it is safe to
assume that it was sent to enlighten Sunace who had been directed, by Summons
issued on February 15, 2000, to appear on February 28, 2000 for a mandatory
conference following Montehermozos filing of the complaint on February 14,
2000.
Respecting the decision of Court of Appeals following as agent of its foreign
principal, [Sunace] cannot profess ignorance of such an extension as obviously, the
act of its principal extending [Montehermozos] employment contract necessarily
bound it, it too is a misapplication, a misapplication of the theory of imputed
knowledge.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to
the principal, employer, not the other way around. The knowledge of the
principal-foreign employer cannot, therefore, be imputed to its agent Sunace.
There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, it and its "owner" cannot be held solidarily liable for any of
50
Montehermozos claims arising from the 2-year employment extension. As the New
Civil Code provides, Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision of
law. Furthermore, as Sunace correctly points out, there was an implied revocation
of its agency relationship with its foreign principal when, after the termination of
the original employment contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate employment contract in
Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if the
principal directly manages the business entrusted to the agent, dealing directly
with third persons.
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED v.
TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO
After a certificate of registration is issued to a union, its legal personality cannot
be subject to collateral attack and may be questioned only in an independent
petition for cancellation.
Respondent Tagaytay Highlands Employees Union (THEU)-Philippine Transport
and General Workers Organization (PTGWO), a legitimate labor organization
representing majority of the rank-and-file employees of petitioner Tagaytay
Highlands International Golf Club Inc. (THIGCI), filed a petition for certification
election before the DOLE Mediation-Arbitration Unit.
THIGCI opposed the petition of THEU on the ground that out of 192 signatories to
the petition, only 71 were actual rank-and-file employees of THIGCI. The others
were supervisors, resigned, terminated, AWOL and employees, while some others
are employees from a different corporation.
The DOLE Med-Arbiter issued an order to the hold the certification election among
the rank-and-file employees of THIGCI. On appeal, Department of Labor and
Employment (DOLE) Undersecretary and the Court of Appeals (CA) affirmed Med
Arbiters decision and ordered that supervisory employees and non-employees
could simply be removed from the roster of rank-and-file membership.
ISSUE:
Whether or not the CA erred in holding that supervisory employees and nonemployees could simply be removed from THEUs roster of rank-and-file
membership instead of resolving the legitimacy of unions status
HELD:
After a certificate of registration is issued to a union, its legal personality cannot
be subject to collateral attack. It may be questioned only in an independent
petition for cancellation.
The grounds for cancellation of union registration are provided for under Article
239 of the Labor Code, two of the grounds are 1.) Misrepresentation, false
statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and
the list of members who took part in the ratification; 2.) Misrepresentation,
false statements or fraud in connection with the election of officers, minutes of
the election of officers, the list of voters, or failure to subject these documents
51
together with the list of the newly elected/appointed officers and their postal
addresses within thirty (30) days from election;
The inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of
Article 239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be
considered to have already acquired juridical personality which may not be
assailed collaterally.
U-BIX CORPORATION and EDILBERTO B. BRAVO v. VALERIE ANNE H.
HOLLERO
An employer who seeks to dismiss an employee must afford the latter ample
opportunity to be heard and to defend himself with the assistance of his
representative if he so desires.
Valerie Anne H. Hollero was hired as a management trainee and was eventually
promoted to facilities manager by U-Bix Corporation (U-Bix). Hollero and three
other employees were later sent to the United States for two months of training
for a newly acquired franchise. Before she left, she signed a contract with U-Bix
which reads that VALERIE ANNE H. HOLLERO shall remain in the employ of UBIX CORPORATION for a period of five (5) years from completion of her U.S.
Training otherwise she shall reimburse U-BIX CORPORATION for all costs
(prorated) and expenses which U-BIX CORPORATION incurred for her (Hollero's)
training in the U.S
U-Bix, citing Holleros supposed pattern of tardiness, absences, neglect of duties
and lack of interest, terminated her employment for loss of trust and confidence.
U-Bix then filed against Hollero before the Labor Arbiter for the reimbursement of
training expenses and damages. Subsequently, Hollero also filed a complaint
against U-Bix for illegal dismissal.
The Labor Arbiter (LA) rendered a decision declaring that the dismissal of Hollero
is valid and legal and ordered her to pay U-Bix the reimbursement of her training.
It dismissed Holleros complaint for lack of merit. On appeal before the National
Labor Relations Commission (NLRC), the NLRC reversed the LAs decision. A
Motion for Reconsideration was filed but subsequently denied by NLRC. The Court
of Appeals affirmed the lower courts decision.
ISSUES:
Whether or not Hollero was illegally dismissed by U-Bix
HELD:
U-Bix failed to discharge the burden of proof that Holleros dismissal is for
a valid and just cause
In termination cases, the employer has the burden of proving that the dismissal is
for a valid and just cause. While an employer enjoys a wider latitude of discretion
in terminating the employment of managerial employees, managerial employees
are also entitled to security of tenure and cannot be arbitrarily dismissed at any
time and without cause as reasonably established in an appropriate investigation.
In the case at bar, U-Bix failed to substantiate their allegations of Holleros
habitual absenteeism, habitual tardiness, neglect of duties, and lack of interest.
52
Daily time records, attendance records, or other documentary evidence attesting

to these grounds could have readily been presented to support the allegations but
none was.
The merits of a complaint for illegal dismissal do not depend on its prayer but on
whether the employer discharges its burden of proving that the dismissal is valid.
U-Bix failed to comply with the procedural due process of dismissing an
employee In another vein, the Court finds that U-Bix and Bravo failed to comply
with the procedural requirements for a valid dismissal. Hollero being a manager
did not excuse them from observing such procedural requirements.
The notice does not inform outright the employee that an investigation will be
conducted on the charges particularized therein which, if proven, will result to her
dismissal. It does not contain a plain statement of the charges of malfeasance or
misfeasance nor categorically state the effect on her employment if the charges
are proven to be true. It does not apprise Hollero of possible dismissal should her
explanation prove unsatisfactory. Besides, the U-Bix and Bravo did not even
establish that Hollero received the memorandum.
Neither did U-Bix and Bravo show that they conducted a hearing or conference
during which Hollero, with the assistance of counsel if she so desired, had
opportunity to respond to the charge, present her evidence, or rebut the evidence
presented against her. The meeting with Hollero on December 23, 1996 did not
satisfy the hearing requirement, for Hollero was not given the opportunity to avail
herself of counsel.
Article 277(b) of the Labor Code mandates that an employer who seeks to dismiss
an employee must afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires. Expounding on
this provision, the Court held that '[a]mple opportunity' connotes every kind of
assistance that management must accord the employee to enable him to prepare
adequately for his defense including legal representation.
UNIVERSITY OF SAN AGUSTIN, INC. v. UNIVERSITY OF SAN AGUSTIN
EMPLOYEES UNION-FFW
593 SCRA 663 (2009), Carpio Morales, J.
A collective bargaining agreement, when voluntarily entered into by the parties,
becomes the law between them.
In the Collective Bargaining Agreement (CBA) between University of San Agustin
and its Employees Union, the parties agreed to include a provision on salary
increases based on the incremental tuition fee increases or tuition incremental
proceeds (TIP). However, the parties disagreed whether or not the term salary
increases includes other increases in benefits received by the employee.
The Voluntary Arbiter held that the salary increase shall be paid out of 80% of the
TIP, should it be higher than P1,500. Moreover, scholarship grants and tuition fee
discounts given by the university should not be deducted from the TIP. The
appellate court sustained the interpretation of the CBA but revised TIP
computation. The present petition questions only the interpretation of the CBA
provision by the appellate court.
ISSUES:
Whether or not the provisions of the CBA should be applied
53
HELD:
It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. If the
terms of a contract, in this case the CBA, are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of their stipulations shall
control.
A reading of the provisions of the CBA shows that the parties agreed that 80% of
the TIP or at the least the amount of P1,500 is to be allocated for individual salary
increases.
The CBA does not speak of any other benefits or increases which would be covered
by the employees share in the TIP, except salary increases. The CBA reflects the
incorporation of different provisions to cover other benefits such as Christmas
bonus (Art. VIII, Sec. 1), service award (Art. VIII, Sec.5), leaves (Article IX),
educational benefits (Sec.2, Art. X), medical and hospitalization benefits (Secs. 3, 4
and 5, Art. 10), bereavement assistance (Sec. 6, Art. X), and signing bonus (Sec. 8,
Art. VIII), without mentioning that these will likewise be sourced from the TIP.
Thus, the universitys belated claim that the 80% TIP should be taken to mean as
covering ALL increases and not merely the salary increases as categorically stated
in Sec. 3, Art. VIII of the CBA does not lie.
In the present case, the university could have, during the CBA negotiations,
opposed the inclusion of or renegotiated the provision allotting 80% of the TIP to
salary increases alone, as it was and is not under any obligation to accept
respondents demands hook, line and sinker. Art. 252 of the Labor Code is clear on
the matter.
The records are thus bereft of any showing that the university had made it clear
during the CBA negotiations that it intended to source not only the salary
increases but also the increases in other employee benefits from the 80% of the
TIP. Absent any proof that the universitys consent was vitiated by fraud, mistake
or duress, it is presumed that it entered into the CBA voluntarily, had full
knowledge of the contents thereof, and was aware of its commitments under the
contract.
It is axiomatic that labor laws setting employee benefits only mandate the
minimum that an employer must comply with, but the latter is not proscribed from
granting higher or additional benefits if it so desires, whether as an act of
generosity or by virtue of company policy or a CBA, as it would appear in this case.
While, in following to the letter the subject CBA provision the petitioner will, in
effect, be giving more than 80% of the TIP as its personnels share in the tuition
fee increase, the universitys remedy lies not in the Courts invalidating the
provision, but in the parties clarifying the same in their subsequent CBA
negotiations.
PLACIDO O. URBANES, JR. v. SECRETARY OF LABOR AND EMPLOYMENT
When the relief sought is not under the Labor Code but for payment of a sum of
money and damages on a breach of contract, it is within the realm of civil law and
jurisdiction belongs to the regular courts.
Petitioner Placido O. Urbanes agreed to provide security services to Social
Security Systems (SSS). During the pendency of their agreement, Urbanes
requested SSS for an upward adjustment of their contract rate in compliance with
the mandated wage increases.
54
SSS ignored the request which led Urbanes to pull out his agencys services and to
subsequently file a complaint against SSS for the implementation of the wage
increase. The Regional Director of the DOLE-NCR issued an order in favor of
Urbanes. SSS filed an appeal to the Secretary of Labor who later on set aside the
order of the Regional Director.
Urbanes filed an appeal by certiorari to the Supreme Court stating that the
Secretary of Labor does not have jurisdiction to review appeals from decisions of
the Regional Director over complaints for recovery of wages when it should have
been appealed to the National Labor Relations Commission. SSS, on the other
hand, contends that Art. 128, not Art. 129 of the Labor Code should be applied.
ISSUE:
Whether or not the DOLE Secretary can exercise jurisdiction over decisions of
Regional Directors involving complaints for recovery of wages
HELD:
Neither the Ubanes contention nor the SSS is impressed with merit. Lapanday
Agricultural Development Corporation v. Court of Appeals instructs so. In that
case, the security agency filed a complaint before the Regional Trial Court (RTC)
against the principal or client Lapanday for the upward adjustment of the contract
rate in accordance with Wage Order Nos. 5 and 6. Lapanday argued that it is the
National Labor Relations Commission, not the civil courts, which has jurisdiction
to resolve the issue in the case, it involving the enforcement of wage adjustment
and other benefits due the agencys security guards as mandated by several wage
orders.
The Court ruled in Lapanday that the RTC has jurisdiction over the subject matter
of the present case. It is well settled in law and jurisprudence that where no
employer-employee relationship exists between the parties and no issue is
involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the Regional Trial Court that
has jurisdiction. In its complaint, private respondent is not seeking any relief
under the Labor Code but seeks payment of a sum of money and damages on
account of petitioner's alleged breach of its obligation under their Guard Service
Contract. The action is within the realm of civil law hence jurisdiction over the
case belongs to the regular courts. While the resolution of the issue involves the
application of labor laws, reference to the labor code was only for the
determination of the solidary liability of the petitioner to the respondent where no
employer-employee relation exists.
In the case at bar, even if Urbanes filed the complaint on his and also on behalf of
the security guards, the relief sought has to do with the enforcement of the
contract between him and the SSS which was deemed amended by virtue of Wage
Order No. NCR-03. The controversy subject of the case at bar is thus a civil
dispute, the proper forum for the resolution of which is the civil courts.
But even assuming arguendo that Urbanes complaint were filed with the proper
forum, for lack of cause of action it must be dismissed. In fine, the liability of the
SSS to reimburse Urbanes arises only if and when Urbanes pays his employeesecurity guards the increases mandated by Wage Order No. NCR-03. The Court
in Lapanday Agricultural Development Corporation v. Court of Appeals held that:
It is only when the contractor pays the increases mandated that it can claim an
adjustment from the principal to cover the increases payable to the security
guards.
55
The records do not show that Urbanes has paid the mandated increases to the
security guards. The security guards in fact have filed a complaint with the NLRC
against Urbanes relative to, among other things, underpayment of wages.
GALAXIE STEEL WORKERS UNION (GSWU-NAFLU-KMU), et al. v.
NATIONAL
LABOR
RELATIONS
COMMISSION,
GALAXIE
STEEL
CORPORATION and RICARDO CHENG 504 SCRA 692 (2006), THIRD
DIVISION, (Carpio Morales, J.)
The requirement of the Labor Code that notice shall be served on the workers is
not complied with by the mere posting of the notice on the bulletin board.
On account of serious business losses which occurred in 1997 up to mid-1999
totaling around P127,000,000.00, Galaxie Steel Workers Union decided to close
down its business operations. It thereafter filed a written notice with the
Department of Labor and Employment (DOLE) informing the latter of its intended
closure and the consequent termination of its employees effective August 31,
1999. It posted the notice of closure on the corporate bulletin board.
On September 8, 1999, Galaxie Steel Workers Union and Galaxie employees filed a
complaint for illegal dismissal, unfair labor practice, and money claims against
Galaxie. The Labor Arbiter, NLRC and the Court of Appeals were unanimous in
ruling that Galaxies closure or cessation of business operations was due to serious
business losses or financial reverses, and not because of any alleged anti-union
position.
The workers union and employees contend that Galaxie did not serve written
notices of the closure of business operations upon them, it having merely posted a
notice on the company bulletin board.
ISSUE:
Whether or not the written notice posted by [Galaxie] on the company bulletin
board sufficiently complies with the notice requirement under Article 283 of the
Labor Code.
HELD:
The mere posting on the company bulletin board does not meet the requirement
under Article 283 of serving a written notice on the workers. The purpose of the
written notice is to inform the employees of the specific date of termination or
closure of business operations, and must be served upon them at least one month
before the date of effectivity to give them sufficient time to make the necessary
arrangements. In order to meet the foregoing purpose, service of the written
notice must be made individually upon each and every employee of the company.
RAMY GALLEGO v. BAYER PHILIPPINES INC., et al.
In distinguishing between permissible job contracting and prohibited labor-only
contracting, the totality of the facts and the surrounding circumstances of the
case are to be considered, each case to be determined by its own facts, and all the
features of the relationship assessed.
Petitioner Ramy Gallego was contracted by Bayer Philippines Inc. (BAYER) as crop
protection technician. When Gallegos employment came to a halt, BAYER
reemployed Gallego through Product Image and Marketing Services, Inc.
56
(PRODUCT IMAGE) performing the same tasks as that of a crop protection

technician.
After a few years, Gallego claims that he was directed to submit a resignation
latter, but he refused. He was later on transferred to Luzon; moreover, his coworkers allegedly spread rumors there that he was not anymore connected with
BAYER. Believing himself to be illegally dismissed, he filed with the National Labor
Relations Commission (NLRC) claiming he is entitled for reinstatement,
backwages, and etc. BAYER denied that existence of an employer-employee
relationship between BAYER and Gallego since Gallego was actually under the
control and supervision of PRODUCT IMAGE, an independent contractor.
The Labor Arbiter found BAYER, et al. guilty of illegal dismissal and ordered the
reinstatement of Gallego. The NLRC reversed the decision of the Labor Arbiter.
Gallego then appealed to the Court of Appeals via Certiorari, which was dismissed.
ISSUES:
Whether or not PRODUCT IMAGE is a labor-only contractor and BAYER should be
deemed Gallegos principal employer
HELD:
Permissible job contracting or subcontracting refers to an arrangement whereby a
principal agrees to farm out with a contractor or subcontractor the performance of
a specific job, work, or service within a definite or predetermined period,
regardless of whether such job, work or, service is to be performed or completed
within or outside the premises of the principal. Under this arrangement, the
following conditions must be met: (a) the contractor carries on a distinct and
independent business and undertakes the contract work on his account under his
own responsibility according to his own manner and method, free from the control
and direction of his employer or principal in all matters connected with the
performance of his work except as to the results thereof; (b) the contractor has
substantial capital or investment; and (c) the agreement between the principal and
contractor or subcontractor assures the contractual employees entitlement to all
labor and occupational safety and health standards, free exercise of the right to
self-organization, security of tenure, and social welfare benefits.
In distinguishing between permissible job contracting and prohibited labor-only
contracting, the totality of the facts and the surrounding circumstances of the case
are to be considered, each case to be determined by its own facts, and all the
features of the relationship assessed.
In the case at bar, the Court finds substantial evidence to support the finding of
the NLRC that PRODUCT IMAGE is a legitimate job contractor.
The Court notes that PRODUCT IMAGE was issued by the Department of Labor
and Employment (DOLE) Certificate of Registration Numbered NCR-8-0602-176.
The DOLE certificate having been issued by a public officer, it carries with it the
presumption that it was issued in the regular performance of official duty.Gallegos
bare assertions fail to rebut this presumption. Further, since the DOLE is the
agency primarily responsible for regulating the business of independent job
contractors, the Court can presume, in the absence of evidence to the contrary,
that it had thoroughly evaluated the requirements submitted by PRODUCT IMAGE
before issuing the Certificate of Registration.
57
Independently of the DOLEs Certification, among the circumstances that establish

the status of PRODUCT IMAGE as a legitimate job contractor are: (1) PRODUCT
IMAGE had, during the period in question, a contract with BAYER for the
promotion and marketing of BAYER products; (2) PRODUCT IMAGE has an
independent business and provides services nationwide to big companies such as
Ajinomoto Philippines and Procter and Gamble Corporation; and (3) PRODUCT
IMAGEs total assets from 1998 to 2000 amounted to P405,639, P559,897, and
P644,728, respectively. PRODUCT IMAGE also posted a bond in the amount of
P100,000 to answer for any claim of its employees for unpaid wages and other
benefits that may arise out of the implementation of its contract with BAYER.
PRODUCT IMAGE cannot thus be considered a labor-only contractor.
GLORIA ARTIAGA v. SILIMAN UNIVERSITY MEDICAL CENTER/ SILIMAN
UNIVERSITY MEDICAL CENTER FOUNDATION, INC.
Constructive dismissal does not exist when an employee furnished the employer a
letter signifying his resignation.
Petitioner Gloria Artiaga was hired by respondent Siliman University Medical
Center (SUMC) as Credit and Collection officer. Artiaga sent a letter to SUMC
stating her wish to resign from said post. Subsequently, three years after she sent
such letter, Artiaga filed a Complaint for constructive dismissal against SU, SUMC
and the Foundation.
SUMC alleged that there was no constructive dismissal. It found that there were
discrepancies in the transactions under Artiagas control and supervision. It was
shown that SUMC wrote Artiaga requiring her to explain in writing why no
disciplinary action should be taken against her, she was also preventively
suspended for 30 days and requested to turn over all monies, files, and records
within her control. Artiaga complied with SUMCs request by giving such letter of
explanation and at the same time tendered her resignation, in which SUMC
accepted.
The Labor Arbiter dismissed the complaint for lack of legal and factual basis. On
appeal, the National Labor Relations Commission (NLRC) set aside the Labor
Arbiters Decision, finding that Artiaga was constructively dismissed. SUMC then
filed a Petition before the Court of Appeals. The CA reversed the NLRC decision
and reinstated the Labor Arbiters decision.
ISSUES:
Whether or not Artiaga was constructively dismissed
HELD:
In reversing the Labor Arbiters decision, the NLRC upheld Artiagas version and
found her to have been constructively dismissed. Artiaga presented no evidence to
substantiate her claim, however.
On the other hand, SUMCs evidence of Artiagas irregular acts is documented.
And it sent Artiaga a Notice requiring her to explain her side and placing her
under preventive suspension. Artiagas letter-explanation cum resignation is selfexplanatory.
Against the documentary evidence of SUMC, Artiagas claim thus fails.
Artiagas claim that SMUCs pieces of evidence were fabricated does not
persuade. Artiagas explanation-resignation letter unquestionably shows that she
58
received the notices referred to, otherwise, to what matters she was explaining
therein?
J-PHIL MARINE, INC. and/or JESUS CANDAVA and NORMAN SHIPPING
SERVICES v.
NATIONAL LABOR COMMISSION and WARLITO E. DUMALAOG
A compromise agreement is valid as long as the consideration is reasonable and
the employee signed the waiver voluntarily, with a full understanding of what he
was entering into.
Worked as a cook on aboard vessels plying overseas, Warlito E. Dumalaog was
employed as a cook on board vessels plying overseas. He filed a pro-forma
complaint on March 4,2002 before the National Labor Relations Commission
(NLRC) against J-Phil Marine, Inc., its then president Jesus Candava, and its
foreign principal Norman Shipping Services.
The Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC
reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the
dismissal for failure to attach to the petition all material documents and for
defective verification and certification. Consequently, a petition was filed before
the Court of Appeals.
While the case was pending in the Supreme Court, the respondent entered into a
compromise agreement and signed Quitclaims and Release. The same has been
subscribed and sworn to before the Labor Arbiter. Accordingly, the case was
dismissed.
ISSUES:
Whether or not the compromise agreement entered into by the respondent,
without his counsel, is valid
HELD:
A compromise agreement is valid as long as the consideration is reasonable and
the employee signed the waiver voluntarily, with a full understanding of what he
was entering into. All that is required for the compromise to be deemed voluntarily
entered into is personal and specific individual consent. Thus, contrary to
Dumalaoag's contention, the employee's counsel need not be present at the time of
the signing of the compromise agreement.
The relation of attorney and client is in many respects one of agency, and the
general rules of agency apply to such relation. The acts of an agent are deemed
the acts of the principal only if the agent acts within the scope of his authority. The
circumstances of this case indicate that Dumalaoag's counsel is acting beyond the
scope of his authority in questioning the compromise agreement.
JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. SHANGRI-LAS
MACTAN ISLAND RESORT and DR. JESSICA J.R. PEPITO
The requirements for the existence of an employer-employee relationship are
different from the requisites for the existence of an independent and permissible
contractor relationship.
59
Jeromie D. Escasinas and Evan Rigor Singco were registered nurses, engaged by
respondent Dr. Jessica Joyce R. Pepito to work in her clinic at respondent ShangriLas Mactan Island Resort (Shangri-La). Escasinas and Singco filed with the
National Labor Relations Commission (NLRC) a complaint for regularization,
underpayment of wages, non-payment of holiday pay, night shift differential and
13th month pay against Shangrila et al., claiming that they are regular employees
of Shangri-La.
Shangri-la claimed that Escasinas and Singco were not its employees but of Dr.
Pepito, whom it retained via Memorandum of Agreement (MOA) pursuant to
Article 157 of the Labor Code. Dr. Pepito for her part claimed that Escasinas and
Singco were already working for the previous retained physicians of Shangri-la
before she was retained. Escasinas and Singco, however, insist that under Article
157 of the Labor Code, Shangri-la is required to hire full-time registered nurse,
hence their engagement should be deemed as regular employment. They maintain
that Dr. Pepito is a labor-only contractor for she has no license or business permit
and no business name registration as mandated by Sec. 19 and 20 of the
Implementing Rules and Regulations of the Labor Code.
The labor arbiter declared Escasinas and Singco to be regular employees of
Shangri-la. The National Labor Relations Commission, on the other hand, granted
Shangri-las and Dr. Pepitos appeal and dismissed Escasinas and Singco complaint
for lack of merit, finding that no employer-employee relationship exists between
Shangri-la and petitioners.
ISSUES:
Whether or not Escasinas and Singco are regular employees of Shangri-la and Dr.
Pepito
HELD:
The existence of an independent and permissible contractor relationship is
generally established by considering the following determinants: whether the
contractor is carrying on an independent business; the nature and extent of the
work; the skill required; the term and duration of the relationship; the right to
assign the performance of a specified piece of work; the control and supervision of
the work to another; the employer's power with respect to the hiring, firing and
payment of the contractor's workers; the control of the premises; the duty to
supply the premises, tools, appliances, materials and labor; and the mode, manner
and terms of payment.
On the other hand, existence of an employer- employee relationship is established
by the presence of the following determinants: (1) the selection and engagement
of the workers; (2) power of dismissal; (3) the payment of wages by whatever
means; and (4) the power to control the worker's conduct, with the latter
assuming primacy in the overall consideration.
Against the above-listed determinants, the Court holds that Dr. Pepito is a
legitimate independent contractor. That Shangri-la provides the clinic premises
and medical supplies for use of its employees and guests do not necessarily prove
that respondent doctor lacks substantial capital and investment. Besides, the
maintenance of a clinic and provision of medical services to its employees is
required under Art. 157, which are not directly related to Shangri-las principal
business operation of hotels and restaurants.
As to payment of wages, Dr. Pepito is the one who underwrites the following:
salaries, SSS contributions and other benefits of the staff; group life, group
60
personal accident insurance and life/death insurance for the staff with minimum
benefit payable at 12 times the employees last drawn salary, as well as value
added taxes and withholding taxes, sourced from her P60,000.00 monthly retainer
fee and 70% share of the service charges from Shangri-las guests who avail of the
clinic services. It is unlikely that Dr. Pepito would report Escasinas and Singco as
workers, pay their SSS premium as well as their wages if they were not indeed her
employees.
With respect to the supervision and control of the nurses and clinic staff, it is not
disputed that a document, Clinic Policies and Employee Manual claimed to have
been prepared by Dr. Pepito exists, to which Escasinas and Singco gave their
conformity and in which they acknowledged their co-terminus employment status.
It is thus presumed that said document, and not the employee manual being
followed by Shangri-las regular workers, governs how they perform their
respective tasks and responsibilities.
Contrary to Escasinas and Singco contention, the various office directives issued
by Shangri-las officers do not imply that it is Shangri-las management and not Dr.
Pepito who exercises control over them or that Shangri-la has control over how the
doctor and the nurses perform their work.
In fine, as Shangri-la does not control how the work should be performed by
Escasinas and Singco, it is not Escasinas and Singcos employer.
LILIA P. LABADAN v. FOREST HILLS ACADEMY et al.
While in cases of illegal dismissal, the employer bears the burden of proving that
the dismissal is for a valid or authorized cause, the employee must first establish
by substantial evidence the fact of dismissal.
Lilian L. Labadan (Labadan) was hired by Forest Hills Mission Academy (Forest
Hills) as an elementary school teacher in 1989. After one year of employment, she
was made registrar and secondary school teacher. In 2003, Labadan filed a
complaint against Forest Hills for illegal dismissal, non-payment of overtime pay,
holiday pay, allowances, 13th month pay, service incentive leave, illegal
deductions, and damages. She alleged that she was allowed to go on leave, and
albeit she had exceeded her approved leave period, its extension was impliedly
approved by the school principal because Labadan received no warning or
reprimand, and was in fact retained in the payroll. Labadan further alleged that
since 1990, tithes to the Seventh Day Adventist church, of which she was a
member, have been illegally deducted from her salary; and she was not paid
overtime pay for overtime service, 13th month pay, five days service incentive
leave pay, and holiday pay; and that her SSS contributions have not been remitted.
Forest Hills claims that Labadan was permitted to go on leave for two weeks but
did not return for work after the expiration of the period granted. Because of
Labadans failure to report to work despite promises to do so, Forest Hills hired a
temporary employee to accomplish the needed reports. When Labadan did return
for work, classes for the school year were already underway. With regard to the
charge for illegal deduction, Forest Hills claimed that the Seventh Day Adventist
church requires its members to pay tithes equivalent to 10% of their salaries, and
that Labadan never questioned the deduction of the tithe from her salary. As
regards the non-payment of overtime pay, holiday pay, and allowances, Forest Hills
noted that petitioner proffered no evidence to support the same.
61
The Labor Arbiter decided in favor of Labadan, and found that she was illegally
dismissed, and dismissed her claims for overtime pay, holiday pay, allowances,
13th month pay, service incentive leave. The National Labor Relations Commission
(NLRC) reversed and set aside the Labor Arbiters decision with regard to the
finding of illegal dismissal. Labadan then filed a Petition for Certiorari with the
Court of Appeals, which was dismissed by the same. Hence, this Petition for
Review on Certiorari.
ISSUES:
Whether or not Labadan was illegally dismissed by Forest Hills
HELD:
While in cases of illegal dismissal, the employer bears the burden of proving that
the dismissal is for a valid or authorized cause, the employee must first establish
by substantial evidence the fact of dismissal.
The records do not show that petitioner was dismissed from the service. They in
fact show that despite petitioners absence from July 2001 to March 2002 which,
by her own admission, exceeded her approved leave, she was still considered a
member of the Forest Hills faculty which retained her in its payroll.
Labadan argues, however, that she was constructively dismissed when Forest Hills
merged her class with another "so much that when she reported back to work, she
has no more claims to hold and no more work to do." Labadan, however, failed to
refute Forest Hills claim that when she expressed her intention to resume
teaching, classes were already ongoing for School Year 2002-2003. It bears noting
that petitioner simultaneously held the positions of secondary school teacher and
registrar and, as the NLRC noted, she could have resumed her work as registrar
had she really wanted to continue working with Forest Hills.
Labadans affidavit and those of her former colleagues, which she attached to her
Position Paper, merely attested that she was dismissed from her job without valid
cause, but gave no particulars on when and how she was dismissed.
BERNARDINO S. MANIOSO v. GOVERNMENT SERVICE
SYSTEM
INSURANCE
Benefits due an employee due to work-related sickness shall be provided until he

becomes gainfully employed, or until his recovery or death.
Bernardino Manioso is an Accounting Clerk I who started working at the Budget
Commission on July 13, 1959. He was transferred to the Bureau of Forestry with
the same position on August 10, 1959. He was promoted to the position of Senior
Bookkepeer of the Department of Environment and Natural Resources, Region IV,
Manila. It was in 1978 when Manioso was found to be suffering from Hypertensive
Vascular Disease. Since then, Manioso was already in and out the hospital for the
purpose of having tests conducted on him and to be hospitalized on several
instances. From January 11, 1995 up to May 15,1995 when Manioso compulsory
retired from the government service on reaching 65 years of age and after serving
almost 36 years, he no longer reported for work. His sick leave covering the said
period was duly approved.
Manioso filed with the GSIS for additional benefits claiming that the ailments for
which he was hospitalized several times in 1997 developed from his work related
62
illnesses.The GSIS disapproved petitioners request upon the ground that he was
already paid the maximum monthly income benefit for eight (8) months covering
the period from May 15, 1995 to January 14, 1996 commensuarate to the degree
of his disability at the time of his retirement. On appeal, the GSISs ruling was also
affirmed. Hence, this petition.
ISSUE:
Whether or not the Manioso is entitled to Permanent Total Disability Benefits
HELD:
Under Article 192 (a) of the Labor Code, any employee who contacts sickness or
sustains an injury resulting in PTD shall, for each month until his death, be paid by
the [GSIS] during such disability, an amount equivalent to the monthly income
benefit, plus ten percent thereof for each dependent child, but not exceeding five.
And under Article 192 (b) of the same Code, the only time the income benefits,
which are guaranteed for five years, shall be suspended is if the employee
becomes gainfully employed, or recovers from his PTD or fails to be present for
examination at least once a year upon notice by the GSIS.
As Manioso's medical records show that the ailments that he suffered in 1997 are
complications that resulted from his work-related ailments, 'the right to
compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from compensable injury.
Manioso's retirement from the service does not prevent him from availing of the
PTD benefits to which he is entitled. For as stated earlier, benefits due an
employee due to work-related sickness shall be provided until he becomes
gainfully employed, or until his recovery or death. None of these is present in
Manioso's case.
It would be an affront to justice if Manioso, a government employee who had
served for thirty six (36) years, is deprived of the benefits due him for work-related
ailments that resulted in his Permanent Total Disability.
MOTOROLA PHILIPPINES, INC., et al. v. IMELDA B. AMBROCIO, et al.
When a company provides a Redundancy Program in favor of the dismissed
employees, the latter already received what was due them under the law.
Sometime in 1997, Motorola Philippines, Inc. (MPI) decided to close its Paraaque
plant in order to consolidate its operations. It thus offered to its affected
employees a redundancy/separation package consisting of separation pay
equivalent to two months salary per year of service, insurance policies, etc. After
availing the separation package, 236 employees filed complaints against MPI for
payment of retirement pay equivalent to one-month salary per year of service.
MPI, on the other hand, insisted that Ambrocio, et al. had already received such
one-month pay, the same having been included in the cash component of the
separation/redundancy package paid to them.
The Labor Arbiter found MPI liable to Ambrocio et al. for the payment of
"retirement pay service benefits" since retirement pay is separate and distinct
from separation pay. The NLRC, however, granted MPIs appeal and dismissed the
complaint of Ambrocio, et al. holding that the benefits received by Ambrocio, et al.
for involuntary separation under MPIs retirement plan included the service pay
benefits, which both grant one months pay for every year of service. Ambrocio, et
al. appealed to the Court of Appeals (CA) which ruled In favor of Ambrocio et al.
Hence, the filing of this appeal.
63
ISSUES:
Whether or not Ambrocios, et al. were entitled to additional retirement benefits
HELD:
Separation pay has been defined as the amount that an employee receives at the
time of his severance and is designed to provide the employee with the
wherewithal during the period he is looking for another employment, and is
recoverable only in the instances enumerated under Articles 283 and 284 of the
Labor Code, as amended, or in illegal dismissal cases when reinstatement is no
longer possible.
Retirement pay, on the other hand, presupposes that the employee entitled to it
has reached the compulsory retirement age or has rendered the required number
of years as provided for in the collective bargaining agreement (CBA), the
employment contract or company policy, or in the absence thereof, in Republic Act
No. 7641 or the Retirement Law.
It is admitted that Ambrocio were terminated pursuant to a redundancy, and not
due to retirement program, hence, they were entitled to a separation pay of onemonth salary per year of service.
As correctly ruled by the NLRC, by whatever version of MPIs Retirement Plan
would be made applicable, of Ambrocio, et al. are entitled to a separation pay of
one-month salary per year of service. Under Sec. III-B of the Plan on which of
Ambrocio, et al. rely, "[i]n case of involuntary separation with the company due to
retrenchment/redundancy, the employee shall be given a service benefit equivalent
to one month per year of service." On the other hand, based on Policy 1215 on
which MPI relies, under the same circumstances, the company shall provide its
employee a separation pay equivalent to one (1) months pay per year of service,
inclusive of any service benefit eligibility under the Retirement Plan.
Thus, when of Ambrocio, et al. were paid a separation pay of two months salary
for every year of service under the Redundancy Package, they already received
what was due them under the law and in accordance with MPIs plan.
IBARRA P. ORTEGA v. SOCIAL SECURITY COMMISSION and SOCIAL

SECURITY SYSTEM
Claims under the Labor Code for compensation and under the Social Security Law
for benefits are not the same as to their nature and purpose.
Petitioner Ibarra Ortega, member of respondent Social Security System (SSS) filed
claims for partial permanent disability benefits on account of his illness with SSS,
which the latter granted for total of 23 months. After the expiration of his pension,
Ortega then applied for total permanent disability benefits but such application
was denied by SSS. SSS observed that Ibarra was already granted benefits under
the same illness and his physical examination showed no progression of his illness.
Accordingly, Ortega filed before Social Security Commission (SSC) a petition
alleging that SSS ignored the fact that his attending physician diagnosed him of
progressed illness. After exhausting administrative remedies, SSC took cognizance
of the petition and after hearing on the merits, it denied Ortegas claim for
entitlement to total permanent disability.
On appeal, the Court of Appeals affirmed in toto the SSC order.
64
ISSUE:
Whether or not Ibarra can claim under Social Security Law for work connected
disability claims insofar as it relates to a demonstration of disability to perform his
trade and profession
HELD:
The conclusion that Ibarra is not entitled to total permanent disability benefits
under the Social Security Law was reached after petitioner was examined not just
by one but four SSS physicians, namely, Dr. Juanillo Descalzo III, Dr. Carlota A.
Cruz-Tutaan, Dr. Jesus S. Tan and Dr. Rebecca Sison.
The initial physical examination and interview revealed that Ibarra had slight
limitation of grasping movement for both hands. According to Dr. Descalzo, this
finding was not enough to grant an extension of benefit since Ibarra had already
received benefits equivalent to 30% of the body. Responding to the allegation that
the April 2000 physical examination was performed in a short period of time, the
doctor credibly explained that petitioner's movements were already being
monitored and evaluated from a distance as part of the examination of his
extremities in order to minimize malingering and overacting. 45
Indeed, the evidence indicates that petitioner's condition at the time material to
the case does not fall under the enumeration in the above-quoted provisions of the
Social Security Law. Moreover, as correctly held by the appellate court, the
proviso of such provisions on the percentage degree of disability applies when
there is a related deterioration of the illness previously considered as partial
permanent disability. In this case, there is dearth of evidence on the proposition
that petitioner's array of illnesses is related to Generalized Arthritis and Partial
Ankylosis of the specific body parts.
Ibarra's reliance on jurisprudence on work-connected disability claims insofar as it
relates to a demonstration of disability to perform his trade and profession is
misplaced.
Claims under the Labor Code for compensation and under the Social Security Law
for benefits are not the same as to their nature and purpose. On the one hand, the
pertinent provisions of the Labor Code govern compensability of work-related
disabilities or when there is loss of income due to work-connected or workaggravated injury or illness. On the other hand, the benefits under the Social
Security Law are intended to provide insurance or protection against the hazards
or risks of disability, sickness, old age or death, inter alia, irrespective of whether
they arose from or in the course of the employment. And unlike under the Social
Security Law, a disability is total and permanent under the Labor Code if as a
result of the injury or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding 120 days regardless of whether he
loses the use of any of his body parts.
SAN MIGUEL FOODS INC. v. SAN MIGUEL CORPORATION EMPLOYEES

UNION-PTWGO
535 SCRA 133 (2007), SECOND DIVISION, (Carpio Morales, J)
65
Gross or flagrant violation of the seniority rule under the CBA is an unfair labor
practice which the Labor Arbiter has jurisdiction.
Some employees of San Miguel Foods Inc. (SMFI) brought grievance against
Finance Manager Gideo Montesa for discrimination, favouritism, unfair labor
practice and harassment. SMFI failed to act on the complaint which prompted San
Miguel Corporation Employees Union PTWGO (the Union) to filea case with the
National Labor Relations Commission against SMFI, its President Amadeo Veloso
and Montesa. It prayed that SMFI et al. be ordered to promote the therein named
employees with the corresponding pay increases or adjustment including payment
of salary differentials plus attorney' s fees[,] and to cease and desist from
committing the same unjust discrimination in matters of promotion.
SMFI filed a motion to dismiss on the alleged ground that the grievance issue
should be resolved in the grievance machinery provided in the collective
bargaining. The Union opposed the motion to dismiss. The NLRC dismissed the
complaint. On appeal, the Court of Appeals affirmed the NLRCs decision. Hence,
this petition.
ISSUE:
Whether or not complaints for violation of seniority rule under the CBA falls within
the Labor Arbiters jurisdiction
HELD:
As for the alleged ULP committed under Article 248 (i), for violation of a CBA, this
Article is qualified by Article 261 of the Labor Code, provides that violations of a
Collective Bargaining Agreement, except those which are gross in character, shall
no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement.
As reflected in the above-quoted allegations of the Union in its Position Paper, the
Union charges SMFI to have violated the grievance machinery provision in the
CBA. The grievance machinery provision in the CBA is not an economic provision,
however, hence, the second requirement for a Labor Arbiter to exercise
jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated the Job Security
provision in the CBA, specifically the seniority rule, in that SMFI "appointed less
senior employees to positions at its Finance Department, consequently
intentionally by-passing more senior employees who are deserving of said
appointment.
As above-stated, the Union charges SMFI to have promoted less senior employees,
thus bypassing others who were more senior and equally or more qualified. It may
not be seriously disputed that this charge is a gross or flagrant violation of the
seniority rule under the CBA, a ULP over which the Labor Arbiter has jurisdiction.
SMFI, at all events, questions why the Court of Appeals came out with a finding
that it (SMFI) disregarded the seniority rule under the CBA when its petition
before said court merely raised a question of jurisdiction. The Court of Appeals
having affirmed the NLRC decision finding that the Labor Arbiter has jurisdiction
over the Union complaint and thus remanding it to the Labor Arbiter for
continuation of proceedings thereon, the appellate court said finding may be taken
to have been made only for the purpose of determining jurisdiction.
66
STA. CATALINA COLLEGE, et al. v. NATIONAL LABOR RELATIONS

COMMISION, et al.
For a valid finding of abandonment, two factors must be present: (1) the failure to
report for work, or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second element as the
more determinative factor, being manifested by some overt acts.
Hilaria Tercero (Tercero) was hired as an elementary school teacher at the Sta.
Catalina College (Sta. Catalina) in June 1955. Fifteen years thereafter, on account
of the illness of her mother, she applied for and was granted a one year leave of
absence without pay. After the expiration of her leave of absence, she had not been
heard from by petitioner school. In 1982, she applied anew at petitioner school
which hired her. On March 1997, Hilaria was awarded a Plaque of Appreciation for
thirty years of service and a gratuity pay. On May 1997, she reached the
compulsory retirement age of 65. Terceros retirement benefits were computed on
the basis of fifteen years of service from 1982 to 1997 and her service from 1955
to 1970 was excluded in the computation. Sta. Catalina asserted that she had, in
1971, abandoned her employment. From the retirement benefits was deducted the
amount representing reimbursement of the employers contribution to her
retirement benefits under the Private Education Retirement Annuity Association
(PERAA) which Tercero had already received. Deducted too was the gratuity pay
which was given to her.
Tercero filed a complaint before the NLRC Regional Arbitration, against Sta.
Catalina for non-payment of retirement benefits. By Decision of October 30, 1998 ,
Labor Arbiter Pedro C. Ramos ruled in favor of the petitioner school. On appeal,
however, the NLRC, set aside the Labor Arbiters decision.
Sta. Catalina then brought the case on certiorari to the CA. The appellate court
however, dismissed the petition, holding that Sta. Catalina failed to prove that
Tercero had abandoned her position in 1970, as Sta. Catalina even gave her a
Plaque of Appreciation for thirty years of service precisely because of her thirty
year continuous service, and that Sta. Catalina never sent notice to her dismissing
her, hence, the employer-employee relationship was not severed and, therefore,
her services for Sta. Catalina during the period from 1955-1970 should be credited
in the computation of her retirement benefits
ISSUE:
Whether or not Tercero is entitled to the retirement benefits differential computed
by the NLRC based on her 29 years of service when she merely rendered 15
continuous years of service prior to her retirement
HELD:
The Court is not unmindful of Terceros rendition of a total of thirty years of
teaching in Sta. Catalina College and should be accorded ample support in her
twilight years. Sta. Catalina in fact acknowledges her dedicated service to its
students. She can, however, only be awarded with what she is rightfully entitled to
under the law.
67
As a general rule, the factual findings and conclusion of quasi-judicial agencies

such as the NLRC are, on appeal, accorded great weight and respect and even
finality as long as they are supported by substantial evidence or that amount of
relevant evidence which a reasonable man might accept as adequate to justify a
conclusion. Where as in the present case, the findings of the NLRC contradict
those of the Labor Arbiter, the Court must of necessity examine the records and
the evidence presented to determine which finding should be preferred as more
conformable with evidentiary facts.
For a valid finding of abandonment, two factors must be present: (1) the failure to
report for work, or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second element as the
more determinative factor, being manifested by some overt acts.
To prove abandonment, the employer must show that the employee deliberately
and unjustifiably refused to resume his employment without any intention of
returning.
Abandonment of work being a just cause for terminating the services of Hilaria,
petitioner school was under no obligation to serve a written notice to her.
ROSALINA TAGLE v. COURT OF APPEALS, et al.

When the provisions of the employment contract are clear and unambiguous, its
literal meaning controls.
Wilfredo Tagle (Wilfredo), husband of petitioner Rosalina Tagle (Rosalina), was
recruited by respondent Fast International Corporation (FIC) to work as fisherman
at Taiwan for its principal, respondent Kuo Tung Yu Huang (Huang). They then
executed an employment contract for one year, extendible for another year upon
mutual agreement of the parties.
During the duration of the contract, the fishing vessel boarded by Wilfredo in
Taiwan collided with another and thereafter sank. Despite efforts to look for
Wilfredos corpus, the same proved futile. He was therefore presumed dead.
Rosalina thus filed a claim for death benefits with FIC. The claim was approved
and Philippine Prudential Life Insurance Co., Inc., (PPLICI) issued a check in the
amount of P650,000.00. Upon receipt by Rosalina of the check, she accomplished
a Release, Waiver and Quitclaim stating that such would be an absolute bar to any
suit that either is now pending or may be henceforth prosecuted concerning
claims, demands, causes of action, etc. Rosalina, however, subsequently filed
before the National Relations Commission (NLRC), a complaint for additional
labor insurance in the amount of NT$300,000.00. On motion of FIC, the Labor
Arbiter dismissed the complaint of Rosalina on the ground that by her prior
execution of the Release, Waiver and Quitclaim she is barred from filing any
subsequent action against FIC.
Rosalina appealed to the NLRC which affirmed the Labor Arbiters decision stating
that nothing on record would indicate that the P650,000.00 paid by PPLICI is
separate and distinct from the obligation of the FIC and its principal Huang
arising from the employment contract and the release and quitclaim forever
barred the filing of any subsequent action against FIC. Upon Petition for Certiorari
before the Court of Appeals (CA), it approved the NLRC resolution finding no
shred of capriciousness or arbitrariness on the part of the NLRC in dismissing her
appeal.
68
ISSUE:
Whether or not the Release, Waiver and Quitclaim executed by Rosalina included
the additional labor insurance she is entitled to as provided for in Section 10,
Article II of her deceased husbands employment contract
HELD:
Death could be a result of accident, but accident does not necessarily result to
death.
Compensation benefits for illness, death, accident which does not result to death,
and partial or total disability are treated separately and differently in the 3paragraph provision of Article II, Section 10 of the employment contract. The said
provision in the employment contract being clear and unambiguous, its literal
meaning controls.
To uphold Tagles claim for additional insurance for accident, assuming that one
for the purpose was secured, after receiving insurance benefits for death arising
from accident, would violate the clear provision of Article II, Section 10 of the
employment contract, the law between the parties. And it would trifle with the
Release, Waiver and Quitclaim, another contract between the parties, barring
Tagle from claiming other or additional benefits arising from Tagles husbands
death-basis of the release of the insurance proceeds to her.
PATRICIA I. TIONGSON, et al. v. NATIONAL HOUSING AUTHORITY

558 SCRA 56 (2008), SECOND DIVISION, (Carpio Morales, J.)
In a situation where a government agency, in this case the National Housing
Authority, took possession of properties belonging to private individuals for
purposes of expropriation and the laws by virtue of which such government
agency expropriated the subject properties were subsequently declared to be
unconstitutional by the Supreme Court, the determination of just compensation
should be reckoned from the date of filing the complaint for expropriation and not
from the time of actual taking of the properties.
Respondent National Housing Authority (NHA) took possession in 1978, for
purposes of expropriation, of properties belonging to petitioners Patricia L.
Tiongson, et al. pursuant to P.D. Nos. 1669 and 1670. The two P.D.s were
thereafter declared unconstitutional by the Supreme Court. On September 14,
1987, the NHA filed before the Regional Trial Court (RTC) a complaint against
Tiongson, et al. for expropriation of parcels of land which were covered by P.D.
Nos. 1669 and 1670.
The RTC held that the determination of just compensation of the properties should
be reckoned from the date of filing of NHAs petition or on September 14, 1987.
However, on appeal, the Court of Appeals reversed and set aside the trial courts
orders and held that the just compensation should be based on the actual taking of
the property in 1978. Hence, this petition.
ISSUE:
Whether or not just compensation should be reckoned from the time of the taking
of the property or on the filing of the complaint
H ELD:
69
In declaring, in its challenged Decision, that the determination of just

compensation should be reckoned from NHAs taking of the properties in 1978, the
appellate court simply relied on Annex C of NHAs petition before it, the Order
dated June 15, 1988 of the then Presiding Judge of the trial court, and thus
concluded that the parties admitted that [NHA] took possession of the subject
properties as early as 1978. The appellate court reached that conclusion, despite
its recital of the antecedents of the case including Tiongson, sustained moves,
even before the trial court, in maintaining that the reckoning of just
compensation should be from the date of filing of the petition for expropriation on
September 14, 1987.
The earlier-quoted allegations of the body and prayer in NHAs Petition for
Expropriation filed before the RTC constitute judicial admissions of NHAthat it
possessed the subject properties until this Courts declaration, in its above-stated
Decision in G.R. No. L-55166 promulgated on May 21, 1987, that P.D. No. 1669
pursuant to which NHA took possession of the properties of petitioners in 1978
was unconstitutional and, therefore, null and void. These admissions, the appellate
court either unwittingly failed to consider or escaped its notice.
Tiongson, et al., even brought to the appellate courts attention, in their Motion for
Reconsideration of its Decision of June 16, 1999, the fact that they had called the
trial courts attention to NHAs allegation-admissions in the body and prayer of its
petition. But the appellate court, by resolution of October 7, 1999, denied
petitioners motion upon the ground that it raised substantially the same issues
that were already considered and passed upon in arriving at its decision. The
appellate courts June 16, 1999 decision glaringly shows, however, that the matter
of judicial admissions of NHA in the body and prayer in its petition were not
considered by it. Vis-a-vis the factual backdrop of the case, the just compensation
of Tiongson, et al.s properties must be determined as of the date of . . . the filing
of [NHAs] complaint on September 14, 1987.
UNITED PHILIPPINE LINES, INC. and/or HOLLAND AMERICA LINE, INC.
v. FRANCISCO BESERIL
The law does not require that the illness should be incurable, what is important is
that he was unable to perform his customary work for more than 120 days which
constitutes permanent total disability, thus, an award of a total and permanent
disability benefit is in order.
Francisco Beseril (Francisco) was hired by United Philippine Line, Inc. (UPL) in
behalf of its principal, Holland America Line (HAL). He is usually rehired by UPL
to serve as one of the seaman in HALs vessel as an assistant cook. In the middle of
his service he started to feel chest pain and was brought ashore and underwent
Triple Heart By-Pass. When he was brought to Manila he underwent several
rehabilitation and physical therapy. One of Franciscos doctors found that he was
unfit to work.
Relying on the findings of the doctor, Francisco and his counsel demanded for
disability pay from his employer UPL and/or HAL. UPL directed Francisco to
undergo an examination with their company doctor. The company doctor found
that Francisco is in fact fit to work as a seaman. Francisco agreed to work again
for UPL but did not show up in their office.
Francisco filed a complaint in the NLRC against ULP and HAL claiming disability
benefits, loss of earning and capacity and damages. The Labor Arbiter awarded
Francisco full amount of the benefits and damages. The NLRC modified the
70
decision of the Labor Arbiter and deleted the award for disability benefits. ULP
and HAL contended that there should be no grant of Disability Benefit because
their company physician certified that he is fit to go back to work. On appeal, the
Court of Appeals reversed the decision of the Labor Arbiter and ruled that the
disability benefit should be awarded
ISSUE:
Whether or not Disability Benefit should be awarded to Francisco Beseril
HELD:
That Francisco was found to be "fit to return to work" by Clinica Manila (where he
underwent regular cardiac rehabilitation program and physical therapy from
January 15 to May 28, 1998 under UPL's account) on September 22, 1998, or a
few months after his rehabilitation does not matter.
UPL tried to contest the above findings by showing that respondent was able to
work again as a chief mate in March 2001. Nonetheless, this information does not
alter the fact that as a result of his illness, respondent was unable to work as a
chief mate for almost three years. It is of no consequence that respondent was
cured after a couple of years.
The law does not require hat the illness should be incurable. What is important is
that he was unable to perform his customary work for more than 120 days which
constitutes permanent total disability. An award of a total and permanent disability
benefit would be germane to the purpose of the benefit, which is to help the
employee in making ends meet at the time when he is unable to work
VIRGEN SHIPPING CORPORATION, et al. v. JESUS B. BARRAQUIO
Resignation is defined as the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of
the exigency of the service and he has no other choice but to disassociate himself
from his employment.
Odyssey Maritime, PTE. Ltd, through Virgen Shipping Corporation, hired Jesus
Barraquio (Barraquio ) as chief cook on board a vessel for a period of ten (10)
months. While the vessel was docked in Korea, Barraquio requested medical
assistance and was diagnosed with suspected ischemic heart disease and
hypertension. Barraquios wrote a letter to the captain informing them that he has
decided to quit his job and will be joining the next disembarkation crew. He signed
a Statement of Account acknowledging set-off of his vacation leave pay from the
cost of finding his replacement and the cost of repatriation.
A year later, respondent filed a complaint for non-payment of 120 days sickness
allowance under Section 20 (B) paragraph 2 of the Standard Employment Contract
for Seafarers, disability benefits, legal interest, reimbursement of medical
expenses, and damages. Barraquio alleged that due to constant verbal abuse from
the ship master, he suffered dizziness, chest pains, headaches and irregular sleep
leading to hypertension. Barraquio alleged that he was forced to execute the
request for disembarkation for fear that his health would worsen; and that medical
findings that he was fit to sail is proof that his condition developed while on board.
The Labor Arbiter rendered judgment in favor of Barraquio finding the foreign
principal and manning agency liable to pay to complainant his money claims. On
71
appeal, the National Labor Relations Commission (NLRC) reversed the ruling of
the Labor Arbiter and dismissed the complaint, finding Barraquios resignation
voluntary; The Court of Appeals reversed the NLRC Decision in light of the
observation that Barraquios hypertension probably developed while on board the
vessel
ISSUES:
Whether or not Barraquio voluntarily resigned
HELD:
From a considered review, the Court finds that respondents resignation was
voluntary.
Resignation is defined as the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of
the exigency of the service and he has no other choice but to disassociate himself
from his employment.
Barraquios resignation can be gleaned from the unambiguous terms of his letter
to Captain Cristino. Barraquios bare claim that he was forced to execute his
resignation letter deserves no merit. Bare allegations of threat or force do not
constitute substantial evidence to support a finding of forced resignation. That
such claim was proferred a year later all the more renders his contention bereft of
merit.
Ischemic heart disease cannot develop in a short span of time that Barraquio
served as chief cook for petitioners. In fact, as indicated above, the Gleneagles
Maritime Medical Centre doctor who treated respondent in May 2000 for abscess
in his left hand had noted Barraquios [h]istory of hypertension for 3 years.
Moreover, the Korean physician did not make any recommendation as to
Barraquios bill of health for petitioners to assume that he was fit for repatriation.
72

Labor Law Case Digests Compilation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Labor Law Case Digests Compilation

Uploaded by

Copyright:

Available Formats

LABOR LAW

ASIA PACIFIC CHARTERING (PHILS.) INC. v. MARIA LINDA R. FAROLAN

BILFLEX PHIL. INC. LABOR UNION et al. v. FILFLEX INDUSTRIAL AND

administrative investigation is before this Court. Allegations without proof do not

CHUAYUCO STEEL MANUFACTURING CORPORATION AND/OR EDWIN

DYNO NOBEL PHILIPPINES, INC. v. DWPI SUPERVISORY UNION

ABELARDO P. ABEL v. PHILEX MINING CORPORATION

International Container Terminal Services, Inc. (APCWU-ICTSI), a duly registered

Retrenchment is a valid ground for the dismissal of an employee.

594 SCRA 761 (2009), SECOND DIVISION (Carpio Morales, J.)

An ordinary striking worker cannot be dismissed for mere participation in an

the other supporting documents attached to the respondents' pleadings, it is found

Whether or not DLSU and Quebengco is guilty of unfair labor practice

entitled to backwages and reinstatement or payment of separation pay in lieu

Reynaldo Madrigalejos v. Geminilou Trucking Service Liberty Galotera et

relevant evidence as a reasonable mind might accept as adequate to support a

MAJURINE L. MAURICIO v. NATIONAL LABOR RELATIONS COMMISSION,

PHILIPPINE AIRLINES, INC. v. ENRIQUE LIGAN, et al.

the authority and credibility of management" and that petitioner "displayed a

Wang. After the expiration of the contract, Montehermozo continued her

Daily time records, attendance records, or other documentary evidence attesting

(PRODUCT IMAGE) performing the same tasks as that of a crop protection

Independently of the DOLEs Certification, among the circumstances that establish

Benefits due an employee due to work-related sickness shall be provided until he

IBARRA P. ORTEGA v. SOCIAL SECURITY COMMISSION and SOCIAL

SAN MIGUEL FOODS INC. v. SAN MIGUEL CORPORATION EMPLOYEES

STA. CATALINA COLLEGE, et al. v. NATIONAL LABOR RELATIONS

As a general rule, the factual findings and conclusion of quasi-judicial agencies

ROSALINA TAGLE v. COURT OF APPEALS, et al.

PATRICIA I. TIONGSON, et al. v. NATIONAL HOUSING AUTHORITY

In declaring, in its challenged Decision, that the determination of just

You might also like